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GAAP vs. IFRS: Long Lived Assets definitions Flashcards

GAAP vs. IFRS: Long Lived Assets definitions
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  • GAAP
    US-based accounting framework established by the Financial Accounting Standards Board, guiding financial reporting and asset treatment.
  • IFRS
    International accounting standards set by the International Accounting Board, used globally for financial reporting and asset valuation.
  • Long-lived Assets
    Resources such as property, plant, equipment, and intangibles expected to provide economic benefits over multiple years.
  • Historical Cost Principle
    Accounting rule requiring assets to be recorded at their original purchase price at the time of acquisition.
  • Property, Plant, and Equipment
    Tangible long-term resources like land, buildings, and machinery used in business operations.
  • Intangibles
    Non-physical assets such as patents, trademarks, and copyrights that provide future economic benefits.
  • Ordinary Repairs
    Routine maintenance expenditures that are immediately expensed and do not extend an asset's useful life.
  • Capital Improvements
    Expenditures that increase an asset's value or useful life and are added to the asset's recorded cost.
  • Depreciation Methods
    Approaches for allocating the cost of a tangible asset over its useful life, including straight line and double declining.
  • Salvage Value
    Estimated amount expected to be recovered at the end of an asset's useful life under GAAP.
  • Residual Value
    Term used in IFRS for the expected remaining value of an asset after its useful life.
  • Fair Value Principle
    IFRS concept allowing assets to be revalued to current market value after initial recognition.
  • Component Depreciation
    IFRS practice of depreciating separate parts of an asset individually when they have different useful lives.
  • Research and Development Costs
    Expenditures related to innovation; always expensed under GAAP, but may be capitalized in IFRS after technological feasibility.
  • Non-monetary Exchanges
    Transactions involving the trade of assets without cash, such as swapping equipment, treated similarly under both standards.