MODULE OBJECTIVES
At the end of this module you will be able to: Identify the various types of fixed assets Citicorp reflects on its books Apply the concept of depreciation and amortization to fixed assets Properly record fixed asset acquisitions and dispositions
Bank Mandiri in cooperation with Citibank N.A. Proprietary Material 2002
FIXED ASSETS
Recorded at cost Depreciated over useful life Gains / Losses recorded on disposition
CAPITALIZATION GUIDELINES
Over $1,000
Single-construction projects
Furniture & Equipment
Costs Capitalized
Non-Capitalizable
Debit Expense (Premises or F & E) Credit Cash / Equiv
Premises
Land Buildings Installations Leasehold Improvements Overseas: - No depreciation - 50 years - 10/20 years - Life of the lease
Depreciation Policy
Consistent for all fixed assets A) Full month depreciation month of acquisition No depreciation month of disposition B) No depreciation - month of acquisition Full month in - month of disposition C) Half month depreciation in Month of acquisition and in month of disposition
Depreciation Cost Useful life 5 years Monthly Dep. Exp. Dr Dep Exp - F & E Cr Accum Dep - F & E 9,000/60 mo = $150 150 150 9,000
Sale:
Assume we sold an auto original cost of $9,000 for $4,000, that had accumulated depreciation of $6,000
Dr Dr
Accum Dep 6,000 Cash 4,000 Cr F&E 9,000 Cr Gain on Sale of F & E 1,000
Sale / Disposition
Trade Ins