Unit 4: Plant assets

students will know:

• The definition and characteristics of plant assets (long-term, tangible assets used in operations)
• The difference between capital expenditures and revenue expenditures
• The historical cost principle and what costs are included in asset acquisition
• The purpose of depreciation as cost allocation, not asset valuation
• The difference between book value and market value
• How useful life and salvage value affect depreciation calculations
• The methods of depreciation:
– Straight-Line
– Double-Declining Balance
– Units-of-Production

Students will:

• Record acquisition of plant assets
• Distinguish between capitalizing and expensing costs
• Calculate depreciation using multiple methods
• Construct multi-year depreciation schedules
• Build depreciation models in Excel
• Compare straight-line and accelerated methods
• Analyze financial statement impact across years
• Calculate book value at different points in time
• Evaluate how depreciation affects profitability trends
• Defend a depreciation method using financial reasoning

Students will demonstrate mastery through:

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• Record the purchase of a plant asset

• Calculate depreciation using at least two methods

• Create a multi-year depreciation schedule in Excel

• Compare the financial statement impact of each method

• Analyze how net income differs across years

• Determine the book value at the end of selected years

• Write a professional explanation recommending a depreciation method

• Evaluate potential ethical implications of depreciation assumptions