Life After Football :: Personal Narrative Writing

Life After Football Experiences change our lives everyday. We learn from our mistakes or successes in order to define who we are. Everything we do, and all that happens to us, changes who we are. However, there are those hears that understructure out above all others, the ones that have a drastic impact on our life styles, the ones that change how we view the world, and how we view our own lives. Our day-to-day modus vivendi changes and we are forced to find new ways to do things, forced to change our views on who we are. The one specific moment that I can particle in my life that created a drastic change of who I am today occurred last year in late August. It was the first week of naturalize and all I was really focused on was the football game coming up on Friday. I had spent most of my summer incubus training and practicing for the upcoming season and I got drastically better than the year before, and was ready for anything. Little did I know what was waiting for me in the game to come. An experience that I never imagined would ever happen to me. An experience that never even crossed my minduntil Friday came. I managed to get through my first week of shallow without much trouble. I was ready for the game. I went through my normal pre-game after school. I decided to put on some new spikes on my cleats, since my other ones were pretty dull. This was an action that I will question for the rest of my life. The school we were playing was just waste the canal bank that passed by our school, so we marched down in full force Now on the field we stretched out. Everything was the same as so many times before. We went into the locker room for the 15 transactions till the game started. I got into my crazy mindset, and started rocking back and forth, thinking of how much pain I would invoke on my opponents, and how I would go about doing that. I ran through all of the plays in my head at least once.

Doctor Jekyll and Mr. Hyde, Frankenstein and Confessions of a Justified

The Gothic Novels of Doctor Jekyll and Mr. Hyde, Frankenstein and Confessions of a Justified Sinner The word Gothic, taken from a Germanic tribe, the Goths, stood firstly for Germanic and then mediaeval. It was introduced to fictionalization by Horace Walpole in Castle of Otranto, a Gothic Story, and was used to depict its mediaeval setting. As more novelists adopted this Gothic setting dark and gloomy castles on high, treacherous mountains, with supernatural howling in the distance other characteristics of the Gothic Novel could be identified. The most dominant characteristic seems to be the constant battle between the upright and the dark post of the human soul and how that, given a chance, the dark side of human nature will gradu everyy develop, through the actions of the character in question, until it has engulfed the good, and also raises the theme of suffering and isolation. some other keynotes of Gothic Novels seem to be the misuse or abuse of technology. For example, s cience is used to create new beings, the characters turning against or abusing nature and/or God, where the character may take on the role of God, the forbidden attraction of evil, the thrill of the kill, and death. The novels Frankenstein, Doctor Jekyll and Mr Hyde and Confessions of a Justified Sinner all contain important truths about human nature and mankind. By looking into these three texts, I am going to explore exactly how they fit or do not fit into the various interpretations of Gothic I have laid out. The two most prominent themes in Doctor Jekyll and Mr Hyde are those of the misuse of technologyand the dark side of man and all its attractions. These two themes are, in fact, directly linked with each other as it is as a r... ... Making monstrous. Frankenstein, criticism, theory. Manchester University Press, 1991. Boyd, Stephen. York Notes on bloody shame Shelleys Frankenstein. Longman York Press, 1992. Mellor, Anne K. Mary Shelley. Her Life, her Fiction, her Monsters. M ethuen. New York, London, 1988. Shelley, Mary. Frankenstein or the Modern Prometheus. Edited with an Introduction and notes by Maurice Hindle. Penguin books, 1992 Stevenson, Robert Louis. The Strange Case of Dr. Jekyll and Mr. Hyde. New YorkDover Publishing, Inc., 1991. Stevenson, Robert Louis. The Strange Case of Dr Jekyll and Mr Hyde. 1886. The Strange Case of Dr Jekyll and Mr Hyde and Other Stories. Harmondsworth Penguin,1979. 27-97. Svilpis, J.E. The Mad Scientist and Domestic Affection in Gothic Fiction. Gothic Fiction Prohibition/Transgression. Ed. Kenneth W. Graham. New York Ams, 1989.

Teenage Abortion Essay -- essays research papers

Teenage Women, Abortion and Law Abortion has always been a very controversial issue. This spate be due to the fact that mess convey different beliefs that be emphasized by their own religion and set of moral values. Many people imagine that stillbirth is wrong, but they believe that is it only wrong low certain circumstances. This could be true, but is it more expert to kill for a special(prenominal) footing than to just do it because you made an irresponsible decision? Because of the wide spectrum of religion and various moral beliefs, there give never be a right or wrong answer to spontaneous abortion.Fact Each year, one million Ameri push aside teenagers become pregnant, and 85% of these pregnancies are unintended. Four in every(prenominal) tail fin Americans begin having intercourse before age 20. Many of the youngest women in this group (60% of those age 15 or under) report having had sex forced on them. By the time they turn 20, rough(predicate) 40% of American women have been pregnant at least once. Many of these young women have little correspondence of their bodies and have begun having sexual intercourse before knowing about ways to prevent pregnancy. Because teens in other developed countries receive more education about sex and have more glide path to contraception and family planning services, they have much lower rates of pregnancy and abortion. For example, in the Netherlands, where teenage sexual bodily function is about the same as in the U.S., pregnancy rates are only one-ninth those of the United States. Fact Of teenage women who become pregnant, about 35% consider to have an abortion rather than bear a child. Next slideTeenagers with unplanned pregnancies face difficult choices. If a teen gives birth and keeps the baby, she will be much more likely than other young women to X drop out of school X receive inadequate prenatal dole out X rely on public assistance to raise her child X develop health problems X have her marr iage end in divorce. Children born(p) to teenage mothers are more likely than children of older mothers to suffer significant disadvantages medical, psychological, economic, and educational. New slideMany states have enacted, or are considering, laws that keep teenagers access to abortion by requiring parental involvement in the abortion decision. Such laws include X Parental notification laws that require medical strength to force out a minors parent(s) of her i... ...el forced to have a baby against her wishes her parents may turn their backs on her or force her out of their home or she readiness spring away from home to face her pregnancy alone. Some teens may resort to a secret, unsafe, il well-grounded or self-induced abortion if her way to a confidential, levelheaded abortion is blocked. Any additional state laws restricting abortion (such as mandatory waiting periods between abortion counseling and abortion procedures) are double taxing for teenage women who have few er resources, less privacy, and less ability to meet all the requirements. All such restrictions to a womans access to safe and legal abortion rob her of her ability to take control of her life. Fact Laws restricting teen access to abortion. Laws in 46 states and the District of Columbia allow mothers who are under 18 to place their children for adoption without involving their parents, but many of those same states require parental notification or consent before these young women can become abortions. This sets up a standard that clearly favors one resolution over another, restricts the reproductive choices of young women, and forces some to bear children that they do not involve to bear. Teenage Abortion Essay -- essays research papers Teenage Women, Abortion and Law Abortion has always been a very controversial issue. This can be due to the fact that people have different beliefs that are emphasized by their own religion and set of moral values. Many people bel ieve that abortion is wrong, but they believe that is it only wrong under certain circumstances. This could be true, but is it more right to kill for a specific reason than to just do it because you made an irresponsible decision? Because of the wide spectrum of religion and various moral beliefs, there will never be a right or wrong answer to abortion.Fact Each year, one million American teenagers become pregnant, and 85% of these pregnancies are unintended. Four in every five Americans begin having intercourse before age 20. Many of the youngest women in this group (60% of those age 15 or under) report having had sex forced on them. By the time they turn 20, about 40% of American women have been pregnant at least once. Many of these young women have little understanding of their bodies and have begun having sexual intercourse before knowing about ways to prevent pregnancy. Because teens in other developed countries receive more education about sexuality and have more access to con traception and family planning services, they have much lower rates of pregnancy and abortion. For example, in the Netherlands, where teenage sexual activity is about the same as in the U.S., pregnancy rates are only one-ninth those of the United States. Fact Of teenage women who become pregnant, about 35% choose to have an abortion rather than bear a child. Next slideTeenagers with unplanned pregnancies face difficult choices. If a teen gives birth and keeps the baby, she will be much more likely than other young women to X drop out of school X receive inadequate prenatal care X rely on public assistance to raise her child X develop health problems X have her marriage end in divorce. Children born to teenage mothers are more likely than children of older mothers to suffer significant disadvantages medical, psychological, economic, and educational. New slideMany states have enacted, or are considering, laws that restrict teenagers access to abortion by requiring parental involvement in the abortion decision. Such laws include X Parental notification laws that require medical personnel to notify a minors parent(s) of her i... ...el forced to have a baby against her wishes her parents may turn their backs on her or force her out of their home or she might run away from home to face her pregnancy alone. Some teens may resort to a secret, unsafe, illegal or self-induced abortion if her way to a confidential, legal abortion is blocked. Any additional state laws restricting abortion (such as mandatory waiting periods between abortion counseling and abortion procedures) are doubly burdensome for teenage women who have fewer resources, less privacy, and less ability to meet all the requirements. All such restrictions to a womans access to safe and legal abortion rob her of her ability to take control of her life. Fact Laws restricting teen access to abortion. Laws in 46 states and the District of Columbia allow mothers who are under 18 to place their children for ado ption without involving their parents, but many of those same states require parental notification or consent before these young women can obtain abortions. This sets up a standard that clearly favors one resolution over another, restricts the reproductive choices of young women, and forces some to bear children that they do not want to bear.

Is it Safe to Pray? :: essays research papers

Is it Safe to Pray?No matter what religion a person practices, everybody has bypast to church whether it is on a perpetual basis or for an occasion such as a wedding or funeral. When you look up at the altar and see the non-Christian priest, you dont question their morality because society is taught not to question a higher authority figure. Why would such a symbol of purity and sanctity bewilder anything shameful to hide? All of the sudden the man at the altar has lawsuits being filed against him. Child molestation is presenting itself as an issue that is becoming recurrent in society and more of an epidemic within the Catholic perform. In the past, the priests involved in these incidents have not been subjected to a punishment equal to the crime they blameted. A priest involved in such deplorable activities should immediately be defrocked and subjected to criminal prosecution.This is a problem that lends itself to secrecy. The priests who commit these immoral acts are master s at using justifications, denial, and within an environment of religion, to look for a higher power for mercy which allows the abusive priest in his own mind to excuse the behavior. The disappointment of or so bishops of the Church and the Church itself to respond effectively in the manner consistent with their positions as leaders with a duty to protect to most conquerable members of the Church, is in some ways more disturbing than the criminal acts of the priests themselves. These same bishops may have confused forgiveness with leniency towards criminal behavior. In some cases, the bishops and other church leaders placed their thoughts and emotions with the accused priests over those of the victims, by accepting the denials from the priests instead of listening to the victims. many cases are adding up into the millions and the churches are file bankruptcy. But ultimately where does the fault lie? What actions should be taken to see that justice is served and have the Catholi c Church remain solvent? If a priest is found to have committed acts of sexual misconduct with minors, he should not be shuttled from one position in the church to another but should in fact be defrocked and removed completely from the Catholic Church and deprived of any services provided by the Church. In this manner, it is possible to remove the temptation from the priest and safeguard the wellbeing of the Church family.Is it Safe to Pray? essays research papers Is it Safe to Pray?No matter what religion a person practices, everybody has gone to church whether it is on a regular basis or for an occasion such as a wedding or funeral. When you look up at the altar and see the priest, you dont question their morality because society is taught not to question a higher authority figure. Why would such a symbol of purity and sanctity have anything shameful to hide? All of the sudden the man at the altar has lawsuits being filed against him. Child molestation is presenting itself as a n issue that is becoming recurrent in society and more of an epidemic within the Catholic Church. In the past, the priests involved in these incidents have not been subjected to a punishment equal to the crime they committed. A priest involved in such deplorable activities should immediately be defrocked and subjected to criminal prosecution.This is a problem that lends itself to secrecy. The priests who commit these immoral acts are masters at using justifications, denial, and within an environment of religion, to look for a higher power for forgiveness which allows the abusive priest in his own mind to excuse the behavior. The failure of some bishops of the Church and the Church itself to respond effectively in the manner consistent with their positions as leaders with a duty to protect to most vulnerable members of the Church, is in some ways more disturbing than the criminal acts of the priests themselves. These same bishops may have confused forgiveness with leniency towards cr iminal behavior. In some cases, the bishops and other church leaders placed their thoughts and emotions with the accused priests over those of the victims, by accepting the denials from the priests instead of listening to the victims. Numerous cases are adding up into the millions and the churches are filing bankruptcy. But ultimately where does the fault lie? What actions should be taken to see that justice is served and have the Catholic Church remain solvent? If a priest is found to have committed acts of sexual misconduct with minors, he should not be shuttled from one position in the church to another but should in fact be defrocked and removed completely from the Catholic Church and deprived of any services provided by the Church. In this manner, it is possible to remove the temptation from the priest and safeguard the wellbeing of the Church family.

Malaria Essay -- Exploratory Essays Research Papers

MalariaThere are a great number of diseases that are endemic in umteen of the poorer, developing nations due to the lack of sanitisation and disease prevention programs in these areas. The steady increase of malaria epidemics in many of the African countries is a point of great concern, because this continent is home to 90% of the servicemans total cases of this particular disease. Malaria gets its name from mal aria, meaning bad air, because patients used to blame the sudden illness on the poor air quality of the nigh swamps. Scientists now know that malaria is a parasitic infection caused by a single-celled protozoan, Plasmodium. Of the four types of this parasite, Plasmodium falciparum is recognized as the most dangerous and lethal string that infects human beings. The female Anopheles mosquito transmits the disease through its saliva, and the protozoan enters the bloodstream and is carried to the liver. The indications of the illness can appear within a week of the film or it can take up to a year for the effects to become noticeable. Malaria has many flu-like symptoms, such as headache, fever, nausea, vomiting, sweating, tiredness, and general muscle pain. These characteristics are attributed to many forms of illness, which can prove difficult in the diagnosis of this serious disease early enough for effective treatment. The treatment of malaria is commonly administered in the form of a DDT (dichlorodiphenyltrichloroethane) antibiotic. This drug works to eliminate the parasite from the patients blood stream and, therefore, limit the chance of communicating the disease and infecting other people. The drug also significantly reduces the frequency of severity of the patients symptoms... ...d Pestilence From Ancient Times to the Present, Rev. Ed. New York Facts on File, Inc., 2001. This article was an updated history of African malaria outbreaks and the specific causes of and reactions to these epidemics.Malaria. CDC Division of epenthetic Diseases Information. 3 Mar. 2002. Center for Disease Control and Prevention. 5 Oct. 2002 . This site gave important information about precautions that travelers should take before going to high-risk areas of the world.Malaria Facts. NIAID Quickfacts Page. 17 Sept. 2002. issue Institute of Allergy and Infectious Diseases, NIH. 6 Oct. 2002 . This NIH site provides an in-depth look at the infection/spread of malaria with multiple links for additional information.

Malaria Essay -- Exploratory Essays Research Papers

MalariaThere are a great number of diseases that are endemic disease in more of the poorer, developing nations due to the lack of sanitation and disease prevention programs in these areas. The steady increase of malaria epidemics in many of the African countries is a point of great concern, because this continent is home to 90% of the worlds total cases of this particular disease. Malaria gets its name from mal aria, meaning bad air, because patients used to blame the abrupt distemper on the poor air quality of the nearby swamps. Scientists now know that malaria is a parasitic infection caused by a single-celled protozoan, Plasmodium. Of the four types of this parasite, Plasmodium falciparum is recognized as the most dangerous and lethal string that infects human beings. The female Anopheles mosquito transmits the disease through its saliva, and the protozoan enters the bloodstream and is carried to the liver. The indications of the illness can appear within a we ek of the exposure or it can take up to a year for the effects to become noticeable. Malaria has many flu-like symptoms, such as headache, fever, nausea, vomiting, sweating, tiredness, and general muscle pain. These characteristics are attributed to many forms of illness, which can prove difficult in the diagnosis of this serious disease early adequate for effective treatment. The treatment of malaria is commonly administered in the form of a DDT (dichlorodiphenyltrichloroethane) antibiotic. This drug works to eliminate the parasite from the patients blood stream and, therefore, limit the hazard of communicating the disease and infecting other people. The drug also significantly reduces the frequency of severity of the patients symptoms... ...d Pestilence From Ancient Times to the Present, Rev. Ed. New York Facts on File, Inc., 2001. This article was an updated history of African malaria outbreaks and the specific causes of and reactions to these epidemics.Malar ia. CDC Division of Parasitic Diseases Information. 3 Mar. 2002. Center for Disease Control and Prevention. 5 Oct. 2002 . This site gave important information virtually precautions that travelers should take before going to high-risk areas of the world.Malaria Facts. NIAID Quickfacts Page. 17 Sept. 2002. National Institute of Allergy and Infectious Diseases, NIH. 6 Oct. 2002 . This NIH site provides an in-depth look at the infection/ banquet of malaria with multiple links for additional information.

More Than One Billion Indians: a Gigantic Problem or a Sea of Opportunities

If the 2011 census is to be believed the current population of India is around 1. 21 one million million plus or minus a few millions and we each(prenominal) know to which side the scale is going to tip. The Indian population is varied not only on the lines of religion, region but also on the pedestal of thought process. While on one hand we are facing the problem of land acquisition from the poorest of poor farmers, on the other hand luxury car maker brand Mercedes has shown a sales growth of 67 percent.The huge population of India provides a large service sector which plays a all-important(a) role in developing the economy of a nation. Moreover, 30% of the population is between the ages of 10-24 years which clearly shows the amount of untapped energy that India has. If used and guides powerful this can be used to boost our industrial and structural sectors.The brain drain that India has suffered since last two decades clearly shows that Indians have huge potential and they a re just looking for the right niche to develop themselves. Indians have raised themselves from all walks of life and made a mark in fields from astronomy to yoga. On the other hand, the resources that the country has are limited and therefore a burgeoning population restricts the per capita availability. We have seen an increase in the crime rate due to the unavailability of even the most basic amenities.The government has clearly hit the mark by creating employment opportunities for the rural masses through programs such as NREGA, NRLM, and so on But even creating such employment opportunities costs the government a lot of money and resources. The glass can be half empty or half full. We may say we have more than a billion mouths to feed but we forget that we also have more than 2 billion hands to make such a humongous task possible.

Thorn Queen Chapter Twenty-Six

It was no secret my mother hated another(prenominal)worldly things. Her detectings werent that hard to understand, considering that shed been a prisoner there, serving as ram Kings forced mistress-not unlike my own experiences now. Just as she tried to ignore what Roland and I did for a living, she also tried to ignore the gentry rail stylus line in me, treating me as though I were fully human and often refusing to hear otherwise.Therefore, I was a bit surprised that she took everything better than Roland did when we got back to Tucson. I knew they had discussions when I wasnt roughly. He filled her in on what had happened in Yellow River, how Id been practicing john on the sly, and how I was now the reigning monarch of a fairyland kingdom. He t overage her ab step forward Leith too. If she was shocked by any of it, if she was repulsed by it and hated me for what Id becomewell, she never let on. She was justwell, my mother.She set me up in my old tooshieroom. It hadnt change d much over the years and even still had the resembling glow-in-the-dark stars Id stuck to the ceiling. When Id put them there in my youth, she had fretted that theyd never come off without ripping out part of the paint. So, I guess shed never bothered in all these years.Roland knew slightlyone who knew mostone who came and did a field surgery on my shoulder, removing the bullet and sacking past me with pain meds and antibiotics. That was or so all I saw of Roland in those initial days of recovery. It was my mom who binded with me the most, talking about anything that wasnt Otherworldly and making reli equal I had entertainment in the form of books and TV. I could pay little attention to those diversions, though, not when my brainiac was on so many other things. I would twisting the events of the previous weeks over and over in my head until I grew too weary to string any coherent thoughts together. When I reached that exhausted point, I would normally just let my mind go blank for a while. It was oddly soothing, particularly since I so often woke up from nightmares about Leith. An empty mind was sometimes welcome.And it was my mother I went to when my period came. Shed already bought a pregnancy test too, just for peace of mind. When it came out negative, I stared sobbing. My mom held me in bed and rocked me the whole time, saying, I manage, baby, I fill in. It was odd because I didnt even drive in why I was crying. The negative test was a good thing, and I was gladiola there were no loose ends with Leith. As she held me-the first time Id really let anyone smirch me since Arts house-I suddenly wondered how she had felt when she was pregnant with me. Had she been repulsed by the thought of the half-gentry baby bird forced on her? Had she valued to get rid of me but been unable to in the Otherworld? I shuddered, not scatty to ponder that too much. Thinking I was cold, she went and got me a sweater.It was a few days later that Roland and I fina lly talked. I was more(prenominal) mobile past and had come downstairs to make a bowl of cereal in the kitchen. He strolled in and joined me, sitting at the table with his coffee. His face seemed to scram more lines than the last time Id seen him. My fault, no doubt.Im sorry, I said when the silence grew too hard to bear. II should keep back told you.He looked up from his cup. Which part exactly?All of it. Everything. I I sighed. You were always so mad that I was spending time in the Otherworld at all. I thought youd be upset if you knew the rest.Oh, believe me, Im much more upset to hear it now than I would have been then.Im sorry, I said again, not knowing what else to say. It all just happened so fast. There was that fight with Aeson-I know, I know. Kiyo gave me the details of that, though he too was a bit surprised to find out you atomic number 50 conjure up hurricanes worthy of ram King now.I shook my head. Im a long way from that. And once I started learning the magicI j ust cant stop.no(prenominal) Roland sighed. Hes been by a couple of times.It took me a moment to realize he meant Kiyo, not Storm King. Im not ready to see him.I know. There was a pause, and I re mention it took a lot for Roland to say his next words. Hes not so bad. Relatively speaking.I gave him a sad half-smile. Yeah, hes great. And I meant itbut something was bothering me about Kiyo, something that unbroken nudging me in the back of my head. I continued to ignore it.So what happens now? Roland asked. What are you passing game to do?I stared in surprise. Wellwhat else would I do? The same thing Ive been doing.What, running back and forth amidst the worlds, act to act like you have some semblance of a normal life?The government note of his voice hurt me. What do you expect me to do? And its not like our lives have ever been normal.He shook his head. This is diametrical. You cant do this. You cant literally live in two worlds.I munched on my cereal for a moment to bequeath me a chance to believe. I dont really see that I have a choice. That land is bound to me. If I neglect it, it dies.Roland said nothing.Oh, come on You think I should do that? Abandon it and let all those people meet? Youre as bad as Art. The mystery of what had happened to Arts body and to Abigail waswell, a mystery. No one had told me exactly, save that it had been frittern care of.Rolands eyeball flashed with anger. No, Im nothing like him. Dont ever make that mistake. merely the gentry arent our people. They arent your people.They are now, I said, surprising myself.He stood up, his entire posture weary and defeated. I dont know what to think anymore. I dont know what to think of you. I dont even feel like I know you.In all these years together, hed never raised a hand to me. But in that moment, it was like hed slapped me. What does that mean? I asked. I meant to sound defiant. Instead, my words came out very small and very scared, much like a appeal childs. I remembered ho w grateful Id been to see him at Arts. My father. My protector. Do you notdo you not love me anymore?Hed started to walk away(p) but paused to look back. His saturnine eyeball took me in for several moments. Of course. I will always love you. Youre my daughter. ButIm not sure if things can ever be the same.Roland walked out of the kitchen, and thats when I realized it was time for me to leave.Tim nearly knocked me over when I got back to my own house. My mom had called him to tell him I was okay when Id first come to her place, but between my recovery week and the week at Arts with no contact, Tim had done a fair amount of freaking out.What happened? Are you okay? I dealt with Lara while you were gone. You would have been proud. I smiled, more pleased that hed called her by her first name instead of bitch secretary. Do you indirect request me to make you something?You sound like my mom, I teased. Always wanting to feed me.He shrugged. Youre too skinny. And I dont say that lightl y, considering the kinds of girls I go after.He was right both about me and his choice in women. Theyd fed me at Arts, but Id hardly eaten any of it. Id lost a lot of weight, and while part of me wanted to bulk back up by tapping the bag of milky Way candy bars in my pantry, I knew I should probably be delving into some serious nutrition for a change. So, I dispatched Tim to cook up some steak stir-fry, a request he was more than eager to accomodate.I spent the rest of the day restless and bored, unsure of what to do with myself. I did some laundry, despite Tims protests that he could do it, and scarfed down lots of his stir-fry. The animals were all there, which led me to believe Kiyo was still staying there too. After Id refused to see him at my parents, I half-expected him to have moved out.Honestly, I wasnt sure what to do now. I didnt plan on overtaking to the Otherworld anytime soon, and there was no way-as I told Lara later on the phone-that I could take any new jobs for a w hile. This do both Tim and her nervous about my accounting, but I knew my savings account was at least temporarily secure.My magic I left completely alone. I wasnt going near that, even though there were times the air and the water vapor around me would call to me like a sirens song, and Id burn to touch them. The one bit of magic I did use was shamanic I tried to summon Volusian. He didnt come. I wasnt sure what to think of that.I was almost grateful for nightfall so that I could go to bed and stop trying to figure out things to pass the time. I wondered if this apathy was just a natural consequence of the trauma Id been through, some kind of numbed state. TV, my puzzles, even Tims cheery chatternone of it could hold my attention. I wasnt bored, exactly. I just wasnt very engaged with the world.That night, just as I used to do, I dreamed of the Thorn Land. The dream was so vivid and real. It was like Id stepped extracurricular my own home to go walking in the foothills, like my s oul was traveling on without my body. The air was sharp and clean, filled with the fragrance of desert flowers. The sunshine was warm and merciless-yet comforting in its familiarity. And the colorsthe colors made my dream self want to weep. Peaches and greens and all the colors of the cacti flowers looking up at the clear blue, blue of the sky. For the first time since my capture and rape, I felt at peace. I felt whole and healed in the dream.I woke up with a longing in my chest, like there was a piece of me missing. The sharpness of it startled me-and scared me a little. Tossing on a robe, I made my way out to the kitchen, hoping coffee and breakfast would shake off that all-consuming desire to run to the Otherworld.Kiyo, I exclaimed. He sat at the table with coffee, both dogs at his feet. I had a weird deja vu from coffee with Roland yesterday and suspected there was a talk in store for me.Eugenie, he said, looking up from the paper. His eyes were warm and chocolate-brown, filled with so much love. He rose from his chair and approached me, arms open. I started to go into his embrace but something made me shrink back, some protective instinct of my bodys to keep itself safe. I knew he wasnt Leith. I knew Kiyo loved mebut there was just something within me that was afraid to touch anyone else. My mother was the only(prenominal) one Id allowed to hug me so far.Sadness and hurt flashed through Kiyos eyes at my rejection, but he seemed to understand. Awkwardly, he simply gave me a soft touch on the arm, which I allowed with only a slight flinch. We both sat down-after Id fetched coffee-and he drank me in with those intense eyes, like he hadnt seen me in years. Of course, these last two weeks or so had certainly felt like years to me, so perhaps that wasnt such a bad comparison.How are you? he asked. Ive missed you so much. Ive been so worried.Im okay. I was in good hands.Hows your shoulder?I gave it a slight shrug. Stiff. But mending. I could probably go over to the Otherworld and get someone to patch it right up.His face instantly darkened. I think you need to stay away from there for a while.Jesus Christ. not you too. Im that lands ruler. I have to go back. A flash of the dream came back to me. It was more than some subconscious musing, I knew. The Thorn Land and I were tied. We couldnt stay apart. I had know that being away from it would cause it to die, and now I was realizing that I efficacy die without it as well.There has to be a way. I was talking to Maiwenn, and shes going to look into it. Surely, somewhere in the pages of their history, someone gave up their kingdom without dying.Is that a good idea? I asked. Me giving it up?Of course, he said, shocked. Youve never wanted it. Youve said so a hundred times. Itd be better for everyone. The next person bound to the land probably wouldnt transform it into a desert. Youd be free, able to go on with your life here, free of the magic.I narrowed my eyes. Ill never be free of that eithe r.Yeah, he agreed, stiffness in his voice, but therell be less temptation outside of the Otherworld. Why the hell didnt you tell me you were learning all that stuff?I did tell you I told you about Dorian displace Ysabel.What I saw you do in therethat was nothing like what you said she taught you.It happened fastI didnt realize it half the time myself, and I didnt want to upset you.No one learns that fast, he muttered. I remembered Shayas words. Storm King did.Well, Im apparently not all-powerful. I lost hold of Volusian during that ordeal. He didnt come when I called.Oh. I thought you knew.Knew what?Hes bound to Dorian now.I stared for several seconds. Oh my God. I thought that might happenKiyo stared back. You did? Then why the hell did you send him to Dorian? Why not send him to warn me?For exactly that reason If Volusian broke from my control, I knew Dorian could probably bind him.I suppose. But I feel like youve just given Dorian a nuclear warhead.I didnt say it, but I had a fe eling Kiyo was more upset that it was Dorian Id contacted for help and not him.And thats how you found me, right? Volusian told Dorian, who then told you and Roland? Id heard it from Roland but wanted to hear it again.Kiyo nodded. Wed been looking for you as soon as you disappeared after the battle. none of us had a clue what had happened. We got Roland involved a few days later to help with a hunt in this world, but none of us He shook his head. None of us had any idea that thats what had happened to you.Awkward silence fell, each of us thinking about the things neither of us would give voice to. My imprisonment. My rape. I lowered my eyes, playing with the edge of the coffee cup. The memories were like a rollercoaster. Sometimes theyd sink way down low into the bottom of my mind. Other times, theyd flare up sharply, pushing to the forefront of my mind and unleashing all the dizzying, horrible feelings of fear, violation, and helplessness that ordeal had caused.I suddenly looked up sharply and met Kiyo square in the eyes. Why didnt you let me defeat Leith when I had the chance? With a shiver, I remembered the vengeance burning within me and the storm swirling around me.The question clearly caught Kiyo off-guard. What? You know why. Because of the political falloutbecause youre not the kind of person given to revenge.Arent I? I demanded. I was suddenly angry at him, and it occurred to me right then that Id been suppressing a lot of it this whole week. You have no right to talk about when revenge is right. You didnt go through what I did.I know, he said, trying to be gentle. I dont doubt he meritd a horrible punishment. I can only imagine how it was for you-No. There is no way you can imagine.Its more than just revenge, though. Do you know whats happened in the wake of this? Katrice is massing her armies, Eugenie. The monarchs havent had an all-out war in ages. This could get very bad. People are going to die. I wanted to save you from thatwanted to save you from being her target.Alright. Then why didnt you kill him?Dead silence.What? Kiyo exclaimed at last.I never lowered my gaze, knocked out(p) at the coldness in my voice. You said he deserved a horrible punishment.Yeah, imprisonment or-Imprisonment? Are you crazy? Hes a prince. We couldnt have kept him without the same political fallout. He would have walked.Going to war is worse, believe it or not.Then you still should have killed him, I repeated. Everyone keeps going on about how youre just a kitsune. You arent technically aligned with anyone. Maybe she would have put a hit out on you, but she wouldnt have gone to war against you alone.Kiyos eyes were wide. Are you listening to yourself? This is insane Youre condemning me for not killing a man that was on his knees.That man did horrible, awful things. He didnt deserve to walk away unpunished.Kiyos shock had given away to anger. I cant believe youre holding me responsible for this. And you know what? This is the magic talking. The more of it you use, the more it changes you. This is why you need to stay away from the Otherworld For your own protection. Before you turn into someone you dont want to be.Oh, now you want to protect me Look, you of all people should understand. I cant stay away from the Otherworld. I cant stay away from this world. I dont belong anywhere And yetI belong everywhere. Theres no good fit for me. Im split, Kiyo. I thought youd get that. You told me in the beginning that you did. Youre the same.Itits different somehow.Thats not good enough. Youre being a hypocrite, I exclaimed. You make decisions for both of us based on whats convenient at any given time. You think you can handle it one way but that I cant. Thats not fair. You cant make different rules for each of us.Im trying to protect you, he repeated.You dont think Im safe enough to handle the things you can?He held up his hands. I dont know. Maybe Im the one who isnt strong enough to make the tough decisions.Dorian is. It was out before I could stop it.Dead silence, round two, descended on us.Kiyo finished his coffee. I see. So thats what this is really about. He stared around, taking in the house and the cats sprawled everywhere. Maybe perchance its time I pack up my things.I crossed my arms. I think thats a good idea.It might take me a day or two to collect these guys, though.Thats fine. I kept perfect control in my voice, focusing all my energy on sounding flat. If I slipped up, I might start crying or begging him to stay. I might apologize for being so harsh and holding him responsible for not letting me kill Leith. It wasnt fair for me to blame Kiyo and laud Dorianand yet I did.Kiyo stood up, saying hed come back to do a thorough packing when I wasnt around since that might be easier on both of us. I agreed. Tension engulfed us as he moved toward the door. Id hurt him I knew it. And truthfully, I didnt fully know if I was making the worst mistake of my life here in breaking up with Kiyo. True, we had be en fighting a lot, with him not understanding the choices Id been having to make. The heart of it was, though, that I felt hed had the opportunity to protect meand hadnt.Eugenie, he said, hovering near the back door. I know you were hurt. I know you suffered-and still do. And I guess I can see why you think what Dorian did was noble. But its not. There are big consequences to this, and someday-probably soon-youre going to regret what he did.I shook my head, still obstinate. I dont know. Maybe.No matter what you think of me, its not too late. You can make amends with Katrice. You can stop this. There was a desperate, pleading look in his eyes, and I wondered if it was because of his desire for peace or the agony of leaving me. My own hurt over him leaving was steadily growing, but something in his words halted it. prevail amends? Whats that mean?I dont knowapologizeblame it on Dorian. Maiwenn might negotiate.My anger spun back up. I am not going to grovel to the woman whose son raped me. And Im not going to let Dorian get punished for something I should have done myself. Maiwenn didnt even deserve mentioning. Ill face the consequences, Kiyo. Im the Thorn Queen.He gave me a small, sad smile. Are you sure? Or are you the Storm Queen?I frowned. What?Thats what you told Leith. Back in the kitchen.No. So much of those memories were fragmented, but I was certain Id recall that. I told him I was the Thorn Queen a few times-but good God. Not Storm Queen.I heard you. Once you said Storm Queen.I shook my head, anger returning. You made a mistake. They sound alike. Easy to mishear.His smile twitched his sadness grew. Not with my hearing.Kiyo left after that-to where, I didnt know. It didnt matter. My heart was broken, and thinking about him too much was only going to make things worse. Instead, I knew I had to leave too. I had to get out of here-and I knew exactly where I had to go.I had to go to my kingdom.

Fixed Assets

bill for unyielding Assets method of flyering for Fixed Assets Second Edition shaft of lightmond H. Peterson bath Wiley & Sons, Inc. Copyright 2002 by John Wiley and Sons, Inc. , natural York. All rights reserved.No break away of this state-supportedation may be reproduced, stored in a retrieval st markgy or transmitted in any form or by any means, electronic, mechanical, photocopying, magnetic disking, s stinkerning or former(a)wise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the curb per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4744.Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc. , 605 Third Avenue, sassy York, NY 10158-0012, (212) 850-6011, fax (212) 850-6008, E-Mail PERMREQ WILEY. COM. T his publication is designed to provide accurate and authoritative information in regard to the subject matter blot outed. It is sell with the understanding that the publisher is non engaged in rendering legal, accounting, or other professional go.If legal advice or other expert assistance is necessary, the serve of a competent professional person should be sought. This appellation is besides gettable in sucker as ISBN 0-471-09210-X. close to content that appears in the print version of this defend may non be available in this electronic edition. For more information about Wiley products, visit our web rate at www. Wiley. com To a number of stack who influenced my manner and prep ard me for the job of creating this book First, my mother, who not only taught me to read, exactly allowed me to experience the enjoyment of reading.She opened up for me the extensive knowledge available in libraries. Dr. Wade Mooreho social occasion, retired Professor of chronicle and for mer Chairman of the Department of Business and Economics at California State University, Hayward, who many an(prenominal) historic gunpoint ago, when I was an undergraduate student in his accounting hang, stimulated my exc levelent about the accounting function. Bless(prenominal)ed with classes of fewer than six students in a advanced university, we spent many class hours discussing the theory of accounting.These interchanges had a large impact on my c atomic number 18er dependion. Earl Malone, a District Accounting Manager, who early in my c argonr forced me to develop my own thoughts and not just rely on past practice. He excessively forced me to aquire the skill of dictation, which do the creative activity of this book a possibility. Dodie Peterson, worlds mellow hat secretary, who converted my ramblings into a manuscript. Contents About the Author Preface Chapter 1 What Is Accounting for Fixed Assets? doorway Consumption of Benefits Characteristics of Assets strike to Change Chapter 2 What Is an Asset? Introduction Historical Cost Matching Principle Fixed Assets Property Plant Equipment Defining Assets politics Accounting User Fees Not-for-Profit Accounting xv xvii 1 1 3 4 9 11 11 12 13 14 16 17 18 20 22 24 24 vii viii Contents Chapter 3 miscellanys of Asset Transactions Introduction Classification Systems Accounting Policy Decisions Coding of Transactions Property Record Coding System 7 27 28 31 33 34 39 39 39 40 44 47 48 49 49 52 52 54 54 55 55 56 57 58 58 59 59 Chapter 4 Determining al-Qaida Unit Introduction Definition of Base Unit Purpose of a Base Unit Establishing Base Units Decision Rules Difficulties in Establishment nation Buildings Equipment Criteria for Establishing Base Units Examples Sp ar Parts Chapter 5 Control of Property, Plant, and Equipment Introduction Asset restrainer Asset Custodian Inventories Property Record System Identification of Assets Farm Owner Applied material bodys Contents ixIdentification of Specific A sset Items to Be labelled Bar Coded Tags Security Chapter 6 Asset Policies Manual Introduction Purpose Creating the Manual Partial Sample Manual Use of the Manual Property, Plant, and Equipment Custodians Responsibilities Responsibilities of Asset Accountant Procedures for Purchase of Physical Assets Approval Limits Minimum Capitalization Level Items Always Charged to Expense Account Transaction Reports Data Definitions Chapter 7 Establishing Value Introduction Historical Cost other Values Uses of Values Insurance Collateral for a Loan Purchase or Sale of a Complete Business First Creation of Property Record 0 61 64 65 67 67 67 69 69 72 72 73 75 75 75 76 76 77 83 83 84 84 85 86 86 87 87 x ContentsValuation Techniques focusing Information Periodic Assessment of Value Chapter 8 Allocation of be to Accounting Periods Introduction Costs of Using up Assets Depreciation Estimated Life Cost Basis Allocation Methods Accelerated Depreciation other(a) Depreciation Concerns Tax versus Boo k Depreciation oddment Sheet Disclosure Not-for-Profit Organizations Chapter 9 Regulated Utilities Introduction Differences in frequently accepted accounting principles Telecommunications Accounting Basic Property Record Telecommunications Plant in Service map of Accounts Railroads Property Accounts Cost of Construction Units of Property List of Units of Property Accounting for Engineering Costs 88 89 90 93 93 94 95 95 96 97 98 99 100 101 101 105 105 106 106 107 109 110 111 111 114 114 115 Contents xiCommon and lose weight Motor Carriers of Passengers Carrier Operating Property Depreciation Minor Items Uniform System of AccountsTangible Accounts Account Definitions Chapter 10 disposal Accounting Introduction measure Focus Fund Accounting Funding for G everyplacenment Assets Accounting Standard Setting Measuring Service Efforts and Accomplishments Current G everyplacenment GAAP Property Records floor Assets Measurement of Utilization Establishing Property Record Establishing P roperty Record Units Infrastructure Property Units Planning Accounting Policies Softw atomic number 18 Selection Off-the-Shelf Softw atomic number 18 Chapter 11 Not-for-Profit Accounting Introduction Accounting Definition of Not-for-Profit Organizations 117 117 117 119 119 119 123 123 124 125 126 126 127 128 128 129 130 131 131 131 132 133 134 135 135 136 xii ContentsAccounting Problems of Not-for-Profit Organizations Formal Accounting Standards Need for Change in Not-for-Profit Accounting Accounting for Property, Plant, and Equipment Creating Property Records Property Record System Documentation Chapter 12 Creation and Verification of Property Records Introduction Purpose of Property Record New Concept Requirements for a Physical Asset Database Property Record Units Coding Systems Property Record Codes for Motor Vehicles Other Codes Required Property Record ID Number Maintenance of the Property Record Database Responsibilities of Asset Manager Updating Records Recording Maintenance Costs Verification of Physical Existence Military Commander snuggle Foreign Corrupt Practices Act Fully Depreciated Assets Reports from the Property Record System Chapter 13 Computer weapons platforms Introduction Asset Database Software 138 139 140 141 143 145 147 149 149 one hundred fifty 151 152 155 155 156 156 157 158 158 159 160 161 161 163 164 165 167 167 167One-Write Systems Existing Database Programs Software Selection Off-the-Shelf Property Record Database Packages Review Copies of Software Evaluation of Software Packages Program Review Checklist for Program Review Database Fields Bibliography Index 168 169 169 170 170 171 172 175 176 179 185 xiii About the Author Raymond (Ray) H. Peterson is veritablely the senior partner of Ray Peterson & Associates, a consulting firm offering pipeline assistance in establishing and changing accounting systems. He has served as the treasurer of a number of nonprofit organizations. He has over thirty years experience as a perplexity accountant with the Bell System. He retired as Director of Financial Accounting with peaceful Bell. Mr. Peterson has swayd the design of Pacific Telephone and Telegraph Companies detail lieu records.During the three-year breakup of the Bell System, he was appointed to a Federal Communications Commission depute force to create a new uniform system of accounts for telephone companies. The proposed system was adopted by the FCC and was installed in all telephone companies. Mr. Peterson served for 12 years on the convey of Management Accountants Financial Accounting Standards Committee and its predecessor Subcommittee on Management Accounting Statement Promulgation. He received a BS from California State University at Hayward and an MBA from Golden Gate University in San Francisco. He also taught accounting and caution information systems at Golden Gate University. xv PrefaceSince the first edition of this book in 1994, not much change has occurred to accounting standards for Pro perty, Plant, and Equipment in business. The GAAP promulgated by the Financial Accounting, FASB, has been to further the excogitation of identifying the embody of an summation and spreading that equal over the accounting boundarys that welfare. Accounting for contri neverthelessions, impairments, and pay of additions pull in been addressed by the FASB. In contrast, much has happened in the areas of Not-for-Profit and Government accounting for unbending assets. FASB clubed the capitalization of assets and charging of derogation by Not-for-Profits. The government Accounting standards bill was created as an equal to the FASB with the authority and responsibility to promulgate GAAP for governments.They re home based the Government Finance Officers Association and its Blue Book, Governmental Accounting, Auditing, and Financial Reporting as the official accounting rules for State and Local government. An early bar by the new GASB was to suspend depreciation for government not- for-profit accounting. There was a determination of jurisdiction between FASB and GASB which are outlined in Chapter 10, Government Accounting and Chapter 11, Not-For-Profit Accounting. Then the GASB issued concept papers that moved government accounting toward the practices long held as appropriate for businesses. These concept papers state that assets should be stickd on the books at acquisition approach and that cost spread over the accounting periods they eudaimonia. This is a major change in accounting for these groups.Past practice was for assets to be acquired and expenditured in the current period, if purchased with general revenue, or not even recorded if purchased with bonds or other special revenue sources. There was immense argument that these changes were not appropriate for governments. Implementation of GASB statement 33 and xvii xviii Preface 34 were delayed, but are now being implemented. The accounting for governments is not the subject of this book and gove rnment accountants are referred to GASB and GFOA publications in the bibliography for the details. However, some discussion is include beca persona it provide be of rice beer to the business accountant that is establishing accounting constitution for business and not-for-profit organizations.There has been considerable argument that dictated assets of businesses should be recorded on the books at something different than depreciated original cost, that adjustments should be made to reflect the mart range up as well as down, and that book asset accounting should be changed from cost parcelling to reflect some criterion of apprize. The public review and promulgation bring of the GASB provide rebuttals to all of those arguments. I urge any accountant that holds those views to research the litigate that GASB statements 33 and 34 followed, much of which is available on the web site at http//www. gasb. org. This book is designed for accountants and managers who want to get the m ost from the physical assets of their organizations. Most readers are already familiar with the oncepts and practical application of total tone management (TQM) zero defects, and the other procedures that describe a continued process of improvement. Having made the process and management changes that brought about easy improvements in quality and cost reduction they are ready to execute the following questions How are you applying the principles of continuous improvement to the management of piazza, industrial plant, and equipment? Do you sop up a process in place that allows you to monitor the status of maintenance (or deferred maintenance) on your property, plant, and equipment? What is the age of the oldest piece of your occupation equipment? Do you imbibe a plan in place for replacement of production facilities?Are there any quality problems in your production or service delivery system caused by property, plant, and equipment failures? What is the utilization percentage of the property, plant, and equipment? Can you act upon the utilization of your most expensive piece of equipment? Do you beget service or production problems attributable to equipment not being available at the place needed? Are all of your property, plant, and equipment being utilized to their fullest? Preface xix Do you have in place a process that monitors the current condition, evaluates the forthcoming need for replacement, and brings to your direction needs to modify that plan? Do you manage your physical assets or do you put them in place, use them, and replace them when they are worn out?Do your plans include having the undeniable cash to purchase replacement physical assets or allow foring you have to do an extraordinary financing or fund-raising when you are surprised by their failure? Is there a plan in place for overall management or do you simply hope your assets will continue to allow you to produce your product or provide your service? The map of providing t his book on accounting for property, plant, and equipment, is to provide the modelling for you to install in your organization accounting processes and procedures that will allow you to manage long-term physical assets. How give the sack a book on assets help answer these questions? All accounting students learn the basics bout assets within various accounting courses, however, there really is not much definitive information available on fixed assets in the accounting literature. The Accounting Principles Board and the Financial Accounting Standards Board are both silent on the subject of accounting standards for fixed assets. Lacking a primordial source for accounting standards, it is necessary to look to utility(prenominal) sources, which also contain very little information on the handling of assets. Most accounting textbooks devote only a single chapter to capitalization of assets, and do not counterbalance the subject in depth. Accounting periodicals have focused on valuat ion of assets, but offer little on specific concepts of capitalization.The issue of valuing at historical cost versus current market equipment casualty has received considerable lodge in over the years. Now the FASB has issued statement 93 requiring not-for-profits to use historical cost less depreciation asset accounting. GASB has issued statements 33 and 34 that require that accounting for all but a few assets. It is even more outstanding to have this single reference to bring all these prospectives together. A number of organizations including the American Institute of Certified Public Accountants, the Institute of Management Accountants, and the Government Finance Officers Association offer courses on capitalization of assets. Most of these courses, however, cover either the tax revenue implications of assets or the valuation question.Little in these courses describes how to establish asset policies, catalogue them in a manual, and apply them within the company. xx Prefac e During 1989-1990, the study Association of Accountants (now the Institute of Management Accountants) replaced their original Statement on Management Accounting (SMA) on Fixed Assets with dickens statements relating to accounting for property, plant, and equipment. SMA 4J, published in 1989, draw the accounting for property, plant, and equipment, and SMA 4L, published in 1990, covers control of property, plant, and equipment. A research issues publication called the Reporting, Control, and Analysis of Property, Plant, and Equipment was published in 1990.This collection of publications represents the majority of the available information on accounting for fixed assets. As a part of the IMA team coordinating those projects, I became convinced this book was needed. There is a need to emphasize that assets moldiness be managed, not just purchased, used up, and replaced. The objective is to provide not only accounting for assets, but include that accounting in a process that will all ow management to get the most out of the companys investment. It is not always possible to create more debt in order to acquire assets. Therefore, some of our consumption essential be sacrificed today in order to provide quality assets for tomorrow.In todays complex business best quality and maximum utilization are going to give the best return on investment. Accounting for Fixed Assets contains more than the routine accounting processes. It also has the management framework that must surround the accounting process. The United States economy has been built since World War II as a paper scale society. We rapidly built our economy based on the philosophy of quick production without much concern for quality. We built automobiles that only run lowed a few years, and, in fact, are still building houses in the same way that we did in the early mid-fifties. They require major renovation every fifteen or 20 years.Many of the houses of the early 1950s are currently the subject of redev elopment districts they either require major repair or must be ripped out and replaced. We have built a tremendous economy and brought the majority of citizens to the highest standard of living of any culture with this doit-quick philosophy. It created many jobs, especially at the unskilled and semiskilled level, and brought the pastime of accomplishment and the fruits of labor to the largest segment of U. S. citizens quickly. We have done so, however, for the sake of today and at the expense of tomorrow. But tomorrow has arrived, and we cannot continue to use up our assets. Those assets undecided of bringing early benefits must be managed in a way that will allow those upcoming benefits to occur. Preface xxiThe European and Japanese economies have expectant much more slowly jobs and the rewards that come from labors are just now reaching many segments of those cultures. However, the infrastructure base there, the assets like roads, houses, and other buildings, constructed in t he 1950s is still in use and not in need of major repairs. A complete difference in philosophical approach was used in building the base for their economies. They have not sacrificed tomorrow for today, but in fact sacrificed yesterday for todayand today has arrived. Assets are those things we purchase today that will bring proximo benefits. But those assets must be managed to get those future benefits.To compete in a level playing field across the world, sooner of in one where we make all the rules, we in the United States must evaluate our present practices. We can no long-term afford to put two or three times the percentage of our gross national product into the nations dumps each year than competing countries do. We can no all-night approach the building and operating of our businesses as we did during World War II. We learned there that we can build things quickly if they are only needed for a few years or are abandoned on the battlefield. Much of our managerial approach to business assets is alarmingly similar build it, use it, and give it away.To many, it is even worse than that we buy it and dont think about it again until it is worn out or disrupts the production line. Accounting managers must think their accounting processes for assets. To be entertain-added, accounting information must be simple and understandable, and must provide relevant, timely information to those who make decisions based on it. My stopping point in producing this book is not just to provide a comprehensive treatment of the details of accounting for fixed assets, but also to provide the management accountant with the processes to provide good relevant decision-making information for the responsibilityrs of the company. Also, I provide the processes that are necessary to manage those assets.The book is organized to allow you to skip over the sign processes necessary to the system, and understand the principles and philosophy that are necessary in managing assets. I wil l also suggest a different approach to management of assets. An asset is current production that is not used up, and sort of provides the means for future productivity. A hundred years ago, assets were cognise by business people as capital goods. Capital goods are something that must be managed for the future, not just to benefit current quarter earnings. Accounting for Fixed Assets 1 What Is Accounting for Fixed Assets? INTRODUCTION Most accounting professionals believe that all there is to be learned about asset accounting occurred in the introductory course on principles of accounting.Therefore, although this subject can mother quite complex, it has not been explored in the accounting literature. In 1984 when the Federal Communications Commission (FCC) called for the rewriting of the uniform system of accounts for telephone companies, public utilities had not been following generally accepted accounting principles (GAAP) as outlined by the Financial Accounting Standards Board (FASB) and its predecessors, but instead used procedures that had been outlined in 1934 by the FCC. The team responsible for making recommendations on the rewriting of the system of accounts established a basic policy that what was to be recommended would comply with current GAAP.The subcommittee responsible for reviewing and recommending procedures for property, plant, and equipment was frustrated by the lack of definitive information on accounting for assets. The primary sources are very limited. The Accounting Principles Board (APB) and the later FASB have been nearly silent on the subject beyond defining depreciation and historical be. Accounting Research Bulletin (ARB) 43 was issued in 1953 to summarize all previous GAAP. It requires that depreciation be calculated 1 2 What Is Accounting for Fixed Assets? and disclosed. Most of the additional discussion on perceptible assets involved explaining why depreciation is appropriately calculated victimisation historical cost.It is true that management must take into consideration the probability that plant and machinery will have to be replaced at cost much great than those of the facilities now in use however, depreciation must not be calculated on the basis of this expected inflation. ARB 43 in paragraph C5 goes on to state The cost of a reproductive facility is one of the cost of the services it renders during its useable economic life. Generally accepted accounting principles require that this cost be spread over the expected useful life of the facility in such a way as to allocate it as equitably as possible to the periods during which services are obtained from the use of the facility.This procedure is known as depreciation accounting, a system of accounting which aims to distribute the cost or other basic value of plain capital assets, less redeem (if any), over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational matter. It is a process of allocatio n, not of valuation. subsequently formation of the Accounting Principles Board, APB 6 was issued in 1964 continuing the authority outlined in ARB 43. The Board continued to support the use of historical cost as opposed to inflation accounting The Board is of the opinion that property, plant, and equipment should not be written up by an entity to reflect assessment, market or current values which are above cost to the entity. APB 12, issued in 1967, requires the disclosure of depreciable assets and depreciation.In addition to total depreciation expense and the major classes of depreciable assets, it also requires disclosure of Depreciation expense for the period. Balances of major classes of depreciable assets by nature of function, at the balance plane date. Accumulated depreciation, either by major classes of depreciable assets or in total, at the balance sheet date. Consumption of Benefits A general description of the method or methods used in computing depreciation with res pect to major classes of depreciable assets. CONSUMPTION OF BENEFITS 3 In 1984, the FASB issued Concept Statement 5, which included additional discussion of assets. However, it was also limited in arena, as one would expect in a concept statement.The discussion emphasized the recognition assumption of assets, clearly indicating that assets are consumed by their use and the cost should be recognized in the accounting periods of their life. Consumption of economic benefits during a period may be recognized either directly or by relating it to revenues recognized during the period. Some expenses such as depreciation and insurance are allocated by systematic and rational procedures to the period during which the thinkd assets are expected to provide benefits. Any expense or loss (in future benefits) is recognized if it becomes lucid that previously recognized future economic benefits of an asset have been reduced or eliminated. Since its creation, the FASB has entertained considerabl e discussion about assets, but the only statements issued cover specific assets Expensing versus capitalizing research and development The accounting for software Depreciation in not-for-profit organization monetary statements Impairment of Assets Involuntary Conversions FASB Concept Statement 6, Elements of Financial Statements, has more material than any other on the accounting for long-term tangible assets. However, it addresses itself primarily to the definition, the purpose of accrual accounting, and the characteristics of an asset. In 1985, Concept Statement 6 added a definition of assets Assets are apparent future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. 4 What Is Accounting for Fixed Assets?CHARACTERISTICS OF ASSETS Concept Statement 6 continues, enumerating the three essential characteristics of an asset It embodies a probable future benefit that involves a capacity, independently or in combination with other assets, to combine directly or indirectly to future net cash in flows. A particular entity can obtain the benefit and control others access to it. The transaction or other event giving rise to the entitys right to or control of the benefit has already occurred. This is the first discussion in promulgated accounting rules discussing the definition and characteristics of an asset. The major thrust is that probable future benefit is the definition of an asset.To reflect it on the balance sheet, the entity must be able to obtain benefit from the asset and control others access to the asset. This statement also reviews the concept of future economic benefit and service potential as it relates to not-for-profit organizations. It states In a not-for-profit organization, the service potential or future economic benefit is used to provide desired or needed goods or services to beneficiaries or other constituents, which may or may not directly result in net cash inflows to the or ganizations. Some not-for-profit organizations rely significantly on contributions or donations of cash to supplement selling prices. . . This discussion introduces the argument that depreciation of tangible assets is an appropriate expense of not-for-profit organizations. In a discussion of accrual accounting, Concept Statement 6 discusses assets under a heading Recognition, Matching, and Allocation. In paragraph 145, it states Accrual accounting uses accrual, deferral, and allocation procedures whose goal is to relate revenues, expenses, gains, and losses to periods to reflect an entitys performance during a period instead of merely listing its cash receipts and outlays . . . the goal of accrual accounting is to account in the periods in which they occur for the effects on an entity of transactions andCharacteristics of Assets other events and circumstances, to the extent that those financial effects are recognizable and measurable. 5 There is a discussion of costs and revenues t o determine profits for periods. Depreciation and assets are excluded from the duplicate concept. Paragraph 149 of Concept Statement 6 explains However, many assets yield their benefit to an entity over several periods, for example, prepaid insurance, buildings, and various kinds of equipment. Expenses resulting from their use are normally allocated to the periods of the estimated useful lives (the periods over which they are expected to provide benefits) by a rational allocation procedure, for example, by recognizing depreciation or other amortization.Although the purpose of expense allocation is the same as that of other expense recognitionto reflect the using up of assets as a result of transactions or other events or circumstances affecting an entityallocation is applied if causal relations are generally, but not specifically, identified. For example, arrogate and tear from use is known to be a major cause of the expense called depreciation, but the amount of depreciation caus ed by wear and tear in a period normally cannot be measured. This discussion appears to make the distinction between the matching principle for revenues and expenses and the allocation of the cost of using up future benefits. Although this distinction is subtle, it is the point of basic disagreement between those who argue for inflation accounting and the depreciating of assets based on current market value and those who argue for depreciating using a lesser historical cost.Appendix B of Concept Statement 6 further discusses characteristics of assets, defining assets as probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. Most of this discussion relates to nonphysical or nonphysical assets. The FASB, in issuing its Statement 2, Accounting for Research and Development Costs, also gives us some information on what makes up tangible physical assets. In their concern for the appropriate accounting for research and development costs, they conclude that all should be supercharged to expense accounts. However, they do give us their thoughts 6 What Is Accounting for Fixed Assets? bout which tangible assets should and should not be included in research and development costs. A prime consideration is that materials, equipment, and facilities that have an alternate future use (in research and development projects or otherwise) shall be capitalized as tangible assets when acquired or constructed. However, the costs of such materials, equipment, or facilities that are acquired or constructed for a particular research and development project and have no alternative future uses and therefore no calve economic values are research and development costs at the time the costs are incurred. All research and development costs encompassed by the statement are charged to expense when incurred.This reflects the concept that research and development costs will be used up during the span of the research project . Tangible assets that have a life beyond the current project, however, should be capitalized and depreciated over their useful lives. The preceding paragraphs summarize the present state of GAAP relating to property, plant, and equipment. Many subjects in accounting have not been covered at length within the promulgated statements. Most with the significance of longterm tangible assets have been covered in more detail in secondary accounting material, but few secondary publications provide any indepth discussion on fixed assets.Research bulletins and disclosure drafts having to do with inflation accounting have not been allowed to creep into generally accepted accounting principles. Therefore, in determining the details of an accounting system for property, plant, and equipment with the FCC study in 1984 and 1985, the committee felt it necessary to use the secondary documents on assets. The documents were used to establish current practice and to form a model that telecommunication s companies should use instead of the 1934 FCC regulations. The only additional definitive document discussing accounting for property, plant, and equipment was issued by the Institute of Management Accountants (IMA, formerly the National Association of Accountants) as Statement on Management Accounting (SMA) 4.SMA 4 was issued in October 1972 with the title, Fixed Asset Accounting The Capitalization of Cost. Several concepts outlined in the twenty-four-page statement include the following Costs through dressing for use Extraordinary repairs Base unit Characteristics of Assets Extended life or increased capacity Written policies Capitalization policy Life greater than one year Self-constructed assets that include direct overhead No initial development cost Depreciation 7 The SMA 4 discusses a number of concepts which were then, and still are, common practice. All Costs to get up Item for Use All costs in addition to the invoice price to make an item of property, plant, and equipme nt ready for use should be capitalized in its historical cost.Extraordinary Repairs Normal repairs are charged to expense when incurred however, extraordinary repairs that extend the life, increase the capability, or increase efficiency of the item should be capitalized during its life, the historical cost increased, and depreciation recalculated from that date forward. Base Unit The base unit concept is not dealt with in any other document. It outlines the concept that property units should have a policy determination as to what constitutes the property record entity that is capitalized. The base unit tycoon be a complete machine or the individual components of that machine. This concept is important when establishing a usable property record system for a particular company. For example, entities that use light trucks as maintenance vehicles may wear out a number of trucks during the lives of hydraulic lifts, welding equipment, and utility beds.Written Policies It is important for each company to have an asset manual with written policies. Determinations of appropriate base units and other policies remarkable to a company must be described and documented. Without written policies, asset accounting will not be consistent over a period of time. 8 What Is Accounting for Fixed Assets? Capitalization Policy A nominal level of capitalization should be identified. Accounting records that cost more than the items are value are not cost effective. Life Greater than One Year Policy should emphasize that items with a life restricted to one accounting period should be expensed no matter what their cost.Self-Constructed Assets All costs of preparing assets for use should be capitalized however, only directly attributable or traceable overhead costs should be included. General and administrative overhead costs should not be capitalized. If a company is not in the business of constructing assets, overhead costs are not likely to be increased by an individual constructio n project. Therefore, if those costs were capitalized, expenses in the accounting period that the asset was being constructed would be improperly reduced. Additionally, the initial development cost of making a decision on which project to construct should not be included in capitalizable costs. Subsequent costs for a specific project, once the decision has been made, are capitalized.Depreciation The idea of the relative permanence of assets that are fixed is questioned by SMA 4. The statement notes that periods of nonuse should be excluded from the depreciation schedule Until these assets can be said to have completely satisfied the purpose for which they are intended normal or acceptable production capabilitythey are, for the time being, hang accounting-wise in a sort of hiatus, not producing income, hence not triggering depreciation against which it is to be set. SMA 4 was replaced in 1989 and 1990 by Statements 4J, Accounting for Property, Plant, and Equipment, and 4L, Control of Property, Plant, and Equipment.These two documents were ready from a research project published by the IMA Research Committee, reporting control and analysis of property, plant, and equipment. In other documents the discussion of accounting for fixed or physical assets is limited to a chapter, or a few paragraphs in accounting textbooks. No lengthy document has been published that brings all the concepts of accounting for property, plant, and equipment together. Need to Change 9 There are many articles on fixed assets in accounting magazines such as Strategic Finance, published by the Institute of Management Accountants (IMA) and the Journal of Accountancy, published by the American Institute of Certified Public Accountants (AICPA). Most of these articles discuss theoretical issues of inflation accounting and depreciation.There are a number of accounting courses offered by such organizations as the IMA, AICPA, and the American Management Association, as well as by a number of ac counting and appraisal firms. However, these courses are mostly directed toward the tax requirements of accounting for depreciation. Similarly, there are numerous off-the-shelf personal computer programs aimed at fixed asset accounting. Again, the primary purpose is to fulfill tax requirements and generate depreciation entries. Only a few provide for comprehensive property records. NEED TO CHANGE It has become axiomatic that management must change the manner in which they approach long-term tangible assets. The many production facilities built in the United States are erosion out.Government infrastructures of roads, sewers, sidewalks, and utilities are all suffering from the concept of put it in place and forget about it. The need is to get the most use out of these tangible assets. Much of the discussion having to do with inflation accounting for assets revolves around the problem that depreciation is not sufficient to cover the replacement costs of assets. The high cost of repl acements, the dwindling supply of capital available, and high interest rates all require that new management control systems be put into place. With adequate control, management, and measurement of asset utilization, organizations can maximize the benefits from their investment in long-lived, tangible assets. 2 What Is an Asset?INTRODUCTION According to the Financial Accounting Standards Board Concepts Statement 6, assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. The Institute of Management Accountants Accounting Glossary adds a second definition as any owned physical object (tangible) or right (intangible) having economic value to its owners an item or source of wealth with continuing benefits for future periods, expressed, for accounting purposes, in terms of its cost, or other value, such as current replacement cost. hereafter periods refers to the following year or years. (SMA 2A) In its bro adest sense, an asset is anything that will probably bring future economic benefit.In looking at assets, the focus will be on longlived tangible assets, sometimes referred to as fixed assets or property, plant, and equipment. Assets are classified into two categories tangible and intangible. Tangible assets are assets that one can touch, hold, or feel. Typically called fixed assets in accounting literature, tangible assets are the physical things that a business uses in the production of goods and services. They constitute the production facilities, buildings, equipment, and vehicles. These operational assets of a business include furniture, computers, and similar items not used up within a year. Intangible assets are primarily financing items stocks, bonds, mortgages, etc.These assets are outside the scope of this book. 11 12 What Is an Asset? Assets that are converted into cash during the normal production cycle are current. Current physical assets are referred to as financial ass ets. These are physical assets such as raw materials, work-in-progress inventories, end goods, and goods held for resale. Physical items can be financial assets, held in inventory, in one business, whereas in other businesses or applications they may be fixed assets. An example of such a financial asset would be real estate held in inventory by a real estate investment and sales organization or builder, which would be a fixed asset for everyone else.Equipment manufacturers have financial assets in finished goods or inventory held for sale, as well as plant and equipment that will be change to other businesses. The inventory is a financial asset when sold for use in a production line it becomes a fixed asset to the purchaser. HISTORICAL COST Historically, asset accounting has not stimulated the interest of accountants and managers in the United States. Assets have been analyzed in depth in terms of alternatives and appropriateness of the investment prior to purchase. However, once acquired and put in place, assets such as buildings, furniture, production equipment, and motor vehicles are given little attention.Where management attention has been focused, it has been in terms of return on investment and major tax benefits, such as investment tax credits and accelerated depreciation expense allowed on tax returns. In fact, these government tax incentives to buy new equipment in order to stimulate the economy have influenced management to replace still-useful assets that have been depreciated on the tax records. But there is a new panorama emerging on the part of managers and accountants with respect to fixed assets. The high initial cost to purchase, as well as the high carrying costs of debt, require a rethinking of the management of fixed assets.Many of the same factors that are bringing about just-in-time accounting philosophies and zerodefect quality control within the manufacturing process are also influencing managers perspectives on asset management. Ze ro defects and quality circles of employees are aimed to reduce the high cost of lessthan-perfect products and reflect todays need for greater precision. To accomplish this higher quality production, it is necessary to have highquality production equipment. This requires preventative maintenance to keep closer tolerances and less downtime. Equipment that Matching Principle 13 fails during a production run leads to extremely high cost when the line stops.Preventative maintenance is being regularly scheduled on either an hours-of-use or calendar basis. This approach has begun to replace the attitude of put it in, use it, if it breaks repair it if it breaks too many times, discard it and replace it. In addition to the requirements of modern processing, a new perspective on the need to manage assetsthose things that you have saved and paid for which will bring future benefits to the business has come about as a result of the significant debt held by many businesses. The publics attentio n has been caught by the high government deficit, which must be financed by acquiring increasingly more debt.Large alive debt and the threat of higher interest rates on new debt due to the lower financial ratings are causing many managers to reconsider how to manage the assets they already have. Getting the maximum future value out of existing buildings and production equipment has become a more important aspect of management. In addition to process requirements and debt concerns, the cost of disposal is also growing at an alarming rate. Replacing individual parts instead of entire machines will reduce the production of refuse. In the past, accounting records of assets have been unbroken primarily for the purpose of establishing balance sheet amounts. The historical cost of purchasing or constructing the physical asset is included in the accounting property record.This amount, less depreciation, provides the basis for a return on investment calculation, the division of net assets (original cost less book depreciation) by net income. MATCHING PRINCIPLE The matching principle of accounting calls for the matching of costs with the accounting period those costs benefit. The purpose of the historical cost record is to ensure that the costs incurred in the purchase of assets in a past accounting period will be spread over the future accounting periods that benefit. The costs recorded for each asset acquired include the purchase price and anything necessary to make it ready for production. All expenditures involved in the acquisition of an asset and getting it ready for use are capitalized as part of original cost.Included are the invoice price for the asset, transportation charges, and installation costs, including any construction or changes to the building necessary to house it. Other incidental costs are sales or use tax, duties on imported items, 14 What Is an Asset? and testing and initial setup costs. The total costs of acquiring and putting the asset into a ctual production use should be capitalized. The use in production at a reasonable production rate (as opposed to limited use during testing) is also the point where capitalization stops on the new asset and depreciation begins. The cost of an asset must be spread on a rational, systematic basis over the periods of its useful life. This limited accounting application of historical cost records has led to many amiss(p) decisions regarding asset management.Recognizing this limitation, however, does not mean historical costs records are not necessary. Records must be established to provide information on location, maintenance history, and future usefulness of assets. Todays high costs of debt and the need to safeguard physical assets requires going beyond the matching principle in creating property records. mend ASSETS Historically, even the term that accountants use for the long-lived tangible assets of business, that is, fixed assets, expressed the opinion that once purchased it is fixed, long term, and does not require management attention. In the last few years, the more common property, plant, and equipment has been used to describe the operational assets of a business.Managers have found it necessary to provide additional information about property, plant, and equipment and created records separate from the accounting property record. Additional information includes current market value for insurance and security purposes, and utilization and maintenance records. A single accounting record of tangible assets with normal accounting controls is far superior to multiple records. This integrated record with accounting controls has been made much simpler with the advent and wide-cutspread use of low-pitched computers. For example, recording maintenance expenses for large equipment items is now easy. In a motor vehicle fleet, actual maintenance costs can be recorded in the property record of each vehicle.This allows review to ensure preventative maintenance is scheduled and also to establish criteria for disposing of older motor vehicles when they are no longer economical to maintain. It then becomes possible to evaluate motor vehicles based on their entire maintenance record, rather than retiring vehicles based on age or mileage alone. What are assets fixed in? Are they fixed in time, space, or value? It is doubtful that they are fixed at all. IMA defines fixed assets as Fixed Assets 15 noncurrent, nonmonetary tangible assets used in normal operations of a business. See property, plant, and equipment in SMA 2A. Past practice has been to handle fixed assets as a drop cost, a past cost which cannot now be reversed and, hence, should not enter into current decisions.Differential cost is the cost that is expected to be different if one course of action is adopted as compared with the costs of an alternative course of action used in decision making. Contrast with sunk costs. (SMA 2A) If it is a fixed cost, then it is also a sunk cost. Is it really an asset if you cannot sell it? If you cannot move it, modify it, or maintain it? Those are alternative actions therefore, historical cost of property, plant, and equipment are differential costs, not sunk costs. The term fixed cost implies a sunk cost. This management treatment of fixed costs as sunk costs may encourage hostile takeovers using junk bonds.If the current management and stockholders ignore the alternative uses of their long-term tangible assets, an out degradeer may see a much greater short-term value. In a case like this the current managers and owners are treating the fixed assets as a sunk cost instead of a differential cost. Few assets are fixed in any way. Most are mobile, and will disappear if not accounted for or deteriorate if not maintained. Many increase in value just because of inflation. If they do not increase in value, their replacement cost for sure increases. Typically, insurance policies require that coverage be at least 80 percent of repl acement cost or recovery is limited to market value prior to the loss.Even the government is learning that their fixed asset theory for infrastructure assets needs amendment. Roads, bridges, sewer plants, and buildings seem to be in need of replacement at the same time, because they were put in place and ignored. No plan was prepared to manage them, to determine the best maintenance practice. Now they are not assets, but sources of liability. While government has a limited liability from suits due to personal injury resulting from improper maintenance of roads, etc. , businesses do not enjoy this limitation. If an employee or customer is injured by one of your bridges, roads, or other holdings, you are responsible for the costs.Is that driveway or parking lot really a fixed asset? Or one to be managed so it will not become a liability? It is difficult to imagine something that should be called a fixed asset. Assets are not fixed in any waynot in place, time, or future income 16 What Is an Asset? or expense. The exception might be a work of art or historical treasure however, even these items, if not protected, will deteriorate. In defining assets, therefore, we shall use the terms property, plant, and equipment and neutralise future use of the term fixed assets, which is in reality an obsolete term for property, plant, and equipment. PROPERTY Property includes take downs and improvements thereon.Land is not depreciated and its cost lasts in our theoretical business model forever. The cost of land includes its acquisition costcosts of appraising, recording, and obtaining title. It also includes the initial costs of making changes to it so that it can be used for the purpose intended. This cost includes removing old buildings, leveling, and perhaps cleaning up any unhealthful residue. When land is acquired together with buildings, the cost will be apportioned between the land and the buildings in proportion to their app jawd value. If the acquisition plan con templates the removal of the buildings, then the total cost including removal is accounted for as cost of land. Any salvage value of the emoved buildings, when devoted of, is deducted from the cost of the land. Toxic residue cleaning provides a particular problem in accounting for land. If the extent of the toxic cleanup costs are known prior to purchase, it is assumed that the purchase price has been reduced accordingly. Then it is correct to include those cleanup costs in the cost of the land. However, where land is owned and toxic residues from past practice are discovered, the cleanup of these items provides no future value. Cleaning up these toxic wastes is similar to washing a rental car or limousine. You may not be able to generate any rental revenue without a clean and polished automobile, but it does not provide future value beyond that.Cleaning up toxic wastes makes the property usable however, it does not provide future benefit It can only restore the usefulness of the property to its level of use prior to recognizing the toxic problem. Improvements that theoretically have an indefinite life are also added to the cost of land. Grading, drainage, sewers, and utilities are examples. These items are put in once and unless damaged by force or disrupted by plans for new uses of the land, they do not require maintenance. Therefore, their life is assumed to be that of land forever in the accepted business model. The proper treatment of property costs is an area that must be spelled out in the accounting manual for the firm so that all similar Plant 17 transactions are handled in the same way.The manual should translate these principles into specific accounting practices for the firm. For example, galvanizing and gas utility installation to the meter or distribution point are usually a part of the land cost. Beyond this, location utilities and part of the individual building investment are to be included in the plant category. The acquisition of property may bring about other expenditures which should be added to its historical cost. Some of these are as follows Contract price Real estate broker commissions Legal fees involved in the transaction Cost of title guaranty insurance policies Cost of real estate surveys Cost of an option that has been exercised Special government assessments Fees harged by government for changes in land use or zoning Cost of removing buildings Cost of cancellation of unexpired lease Cost to move tenant if due by purchaser Payment of past due taxes if payable by purchaser Cost of easements or rights of way Assessments for the construction of public improvements Deduction of salvage value from buildings removed and sold Toxic waste cleanup Grading land and providing drainage Placing utilities PLANT The term plant has its origin in manufacturing, where the plant is literally used to house the production equipment. This includes buildings and other structures or improvements that have a limited life. Paved parking lots and sprinkler systems, as well as recreational and landscaping improvements, are included.Also included in plant are fences, roads, and grading and excavation costs necessary to construction of the buildings. The distinction between property (land) and plant is the 18 What Is an Asset? duration of usefulness. Improvements to the property that will have a measurable or estimated life should be depreciated over that life. Therefore, they are charged to the plant account. If they are of indefinite life, they are treated as property. All expenditures directly related to the purchase or construction of buildings or other physical plant are included in plant cost. Land includes the cost of preparation of a construction site. All costs for a specific construction are included in the cost of the product.Some of the other expenditures that should be added to the capitalized cost of the asset acquired are as follows Contract price or cost of construction Cost of grading and excav ation for the specific building Expenses incurred in removing trees and other foliage for the specific building Costs of remodeling or altering a purchased building to make it ready for use Costs for architects fees, plans, and other planning events Cost of government fees and building permits Payment of prior year taxes accrued on the building if payable by purchaser Other costs such as security or temporary fencing, temporary buildings used during construction, or other costs directly attributable to the construction or purchase of the specific building Capitalized interest EQUIPMENT Equipment includes the machinery, computers, office equipment, and all other long-lived items necessary for the operation of the business.These items require more managerial control because of their portability and general usefulness for other than the purpose intended when acquired. They range in price from a minimum capitalization level to many millions of dollars for complex production machinery. B ecause of the wide variety of requirements for different items of equipment, we shall discuss them in several categories, including Tools Building systems (heating, cooling, elevators) Equipment Irrigation equipment Furniture and office equipment Computers Printing presses Automobiles Tractors Trucks Trailers Aircraft Livestock Furniture and Office Equipment 19 Furniture and office fixtures are long-lived assets needed to run a business.In the service industries, except for buildings, these will be the major tangible assets of the business. The establishment of a reasonable minimum capitalization level has to be weighed against the other factors of managing this class of equipment. Office desks and chairs that are personally used by one manager will receive the attention necessary to safeguard and ensure proper maintenance as required. Many companies establish a $5,000 minimum capitalization level for these items. However, telephone equipment purchased may become obsolete or require significant maintenance after a short period of time. Also, office copiers, fax machines, and computers have a need for greater management and future planning.It is important that these items not all have a requirement for replacement in the same future year. Inclusion in the property record, which subjects such items to the controls provided in that system, may in fact reduce the dollar value at which it is desirable to maintain capitalization. These items should be included in a detailed policy and outlined in the handbook on asset capitalization or its chapter in the accounting policy manual of the business. When the decision is made to capitalize a particular item of equipment, all costs involved in putting it into a condition ready for use should be included in the asset value. Some of the costs that may be incurred are Contract price Commissions paid 20 What Is an Asset?Legal fees and other exhort costs Cost of title guaranty insurance policies Cost of transferring title Fre ight, handling, and storage costs Sales or use tax and other taxes or fees assessed Costs of preparation of the space for installation (foundations, special walls, removal of windows) Use of cranes or other means of installation Installation charges Cost of testing and preparation for use Costs of reconditioning used equipment purchased DEFINING ASSETS Assets are not always easily defined. For example, a Berkeley, California, producer of baby vegetables for New York City upscale restaurants could not function without the regular and dependable inexpensive air shuttle of the crop each morning.The New York restaurants pay a premium for the product, but it must be picked that morning and delivered to New York City by noon for serving in restaurants that evening. Is the transportation link from San Francisco airport to New York an asset of this Berkeley producer? From an accounting sense, it is not however, it continues to deliver future benefits to the company. Without that transportat ion link being available, there would be no business but it would be impossible to establish any value to that transportation link without a sale. If the business were to be sold, it is likely to command as an operating business more than the value of its individual components. This additional value will be included on the purchasers balance sheet as thanksgiving.Much of that goodwill can be a result of an existing working transportation system from the producers garden to the upscale restaurants. Goodwill is an intangible asset. Accounting recognizes it only because there has been an actual payment for it. It must be recognized somehow as its usefulness is used up over future periods. The asset exists whether it is recognized in the book of accounts as goodwill or not. However, this emphasizes the accounting concept of recognizing asset value in accounting systems for the purpose of measuring the decrease in its future usefulness in blood to its original cost. In this Defining As sets 21 case, it is not a problem in defining the asset, but in establishing the assets value. There are other difficulties in defining an asset.In industries where investment in property, plant, and equipment is low in comparison to return on products, there has been no need to closely manage the investment in assets. Examples are restaurants where investment is limited to leasehold improvements. The concern of restaurant managers is keeping their lease and labor costs down. The investment in fixed assets required to run a substantial restaurant is small in comparison to its gross sales. The investment in leasehold improvements for a restaurant many times are sunk costs. They have value only to the end of the lease. It may also be desirable for marketing purposes to substantially alter them prior to the end of their useful life.Here the value is easily established based on what they cost to install. However, they might not be providing future benefits and therefore require replacem ent before their costs have been recognized. A different management problem exists when investment in capital items is large relative to the cost of production or when there are few other opportunities to use the assets for different purposes. Examples are oil refineries and pharmaceutical laboratories. Once the refinery or drug production facilities are constructed, they are not quick usable for any other purpose. There is also little opportunity to make decisions relative to alternative use of these assets.A grocery store location could be altered to become a restaurant or a hardware store, but an oil refinery would cost more to dismantle than it originally cost to construct. These cases raise the question of the value of alternative uses. The accounting principle of recognizing decline in service value through depreciation takes this into account in the concept of salvage value. Salvage value is the value which the asset has at the end of its useful life. The oil refinery would have a nega