Self Constructed Assets And Nonreciprocal Transfers
Self Constructed Assets And Nonreciprocal Transfers
Accounting Discussion Questions
Self Constructed Assets and Nonreciprocal Transfers” Please respond to the following:
- Imagine you are the senior accountant in the Fixed Assets department at your organization, and management is undecided as to whether it should construct its fixed assets or purchase such assets from an outside source. You are responsible for preparing a report to management, highlighting the advantages and disadvantages of self-constructed assets. Suggest to management two (2) advantages of purchasing the assets from an outside organization, as opposed to constructing the assets internally. Justify your response.
- Imagine that management is considering a nonreciprocal transfer of an old asset. Determine the key arguments for and against the accounting treatment of a nonreciprocal transfer. Select a position for or against the accounting treatment, and explain the method that reflects the best accounting practice.
Answer preview
Advantages and disadvantages of self constructed assets
Self constructed assets have benefits to the organization. An organization usually has complete control over the assets. The self constructed assets are also tailored to meet the unique needs of the business. On the hand, there are various disadvantages of self constructed. Self constructed assets utilize a lot of resources of the organization. It is essential to note that the business need change over time. Self constructed assets stay current and thus does not accommodate the changing business needs (Kieso, Weygandt, & Warfield, 2012)……………….
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FORMAT:APA