What Form 4797 Expenditures 2022-2023

Instructions and Help about What Form 4797 Expenditures

In this video we're gonna talk about the cost that are capitalized when a firm acquires property plant and equipment so you might be thinking hey whatever the cost is of a building or of a piece of land or equipment let's say it's eight hundred dollars for a piece of equipment that cost is what's going to become the assets value when we record that piece of equipment on the balance sheet and you'd be right but you can't neglect other costs for example let's say there was 50 dollars in shipping and handling to get this machine to your firm then the amount that you're gonna initially record on the balance sheet is actually going to be 850 dollars so you don't just include the purchase price that's certainly part of it but you also include the shipping and handling and there are a lot of different types of costs that can be involved with property plant and equipment when you acquire PP&E and so I just want to give you an overview of those costs and show you how it would affect your calculations so let's start with property with a piece of land and we're assuming here that this isn't land you just buy for speculative purposes and and have no intention of building a warehouse or something there if that were the case then the land would be accounted for as an investment a long-term investment for the firm we're talking about land where you intend to build a warehouse or a manufacturing plant or something so the purchase price the amount you pay for the land is definitely going to be included in the lands initial asset value but also any cost to prepare the land for use and what it means when I...