Materials, labor and overhead.
What are non pay costs or Costs that occurs but you really don't pay them. The biggest Cost which a business don't pay but occurs is the Depreciation Expense. You don't pay for the Depreciation Expense. its just devaluation in the assets of a business. A business uses its assets and the assets value don't remains the same at the end of the year as it was in the beginning of the year. There are different methods used to calculate the Depreciation Expense which is another question.
expenses
The Q ratio is calculated as the market value of a company divided by the replacement value of the firm's assets Tobin's Q ratio
Historical cost model is a valuation process for assets wherein they are valued at cost of acquisition plus all costs incidental to cost of acquisition.
I think that is asset.Asset is any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property. On a balance sheet, assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings. From an accounting perspective, assets are divided into the following categories: current assets (cash and other liquid items), long-term assets (real estate, plant, equipment), prepaid and deferred assets (expenditures for future costs such as insurance, rent, interest), and intangible assets (trademarks, patents, copyrights, goodwill).Assets have three essential characteristics:1- The probable present benefit involves a capacity, singly or in combination with other assets, in the case of profit oriented enterprises, to contribute directly or indirectly to future net cash flows, and, in the case of not-for-profit organizations, to provide services;2- The entity can control access to the benefit;3- The transaction or event giving rise to the entity's right to, or control of, the benefit has already occurred.
Some countries require research costs to be expensed and development costs to be capitalized
Organization costs are capitalized under Other Assets (non-current) and amortized (written off to an expense account) over a period of time, usually 60 months.
product costs
Costs that are treated as assets until the product is sold are called product costs. The costs are added to the inventory, and the expense is recognized when the inventory is purchased.
Off-site costs are typically capitalized when they directly contribute to the acquisition, construction, or improvement of an asset, and when they meet specific criteria such as adding value to the asset or extending its useful life. However, expenses incurred for routine maintenance or day-to-day operations are usually expensed as incurred.
It shouldn't be capitalized.
Canadian Trademark registration costs can be capitalized. • Trademarks and trade names are renewable indefinitely every 15 years, so the legal life may be unlimited; the useful life, however, may be limited • Costs of acquired trademarks or trade names are capitalized • If trademarks or trade names are developed by the business, all direct costs are capitalized • If the future benefits of a trademark is determined to have an indefinite life, it is not amortized.
Those costs which used in business for more than one fiscal year treated as fixed assets.
The values of assets such as plants or inventories can change elastically. Using costs instead of values for elastic assetsÊis more accurate for calculating expenses.
What are non pay costs or Costs that occurs but you really don't pay them. The biggest Cost which a business don't pay but occurs is the Depreciation Expense. You don't pay for the Depreciation Expense. its just devaluation in the assets of a business. A business uses its assets and the assets value don't remains the same at the end of the year as it was in the beginning of the year. There are different methods used to calculate the Depreciation Expense which is another question.
The difference in operating income between the two methods is the difference in ending inventory values, which is the fixed overhead costs that have been capitalized as an asset ( inventory ) because overhead costs that have been capitalized as an asset.
1075