Section 2: 30–40%2D
Property, Plant, and Equipment
PP&E is tested heavily because there are many ways to record it incorrectly. AICPA focuses on initial cost capitalization, depreciation methods, disposals, and impairment.
What AICPA Wants You to Know
- 1Determine the initial cost basis of PP&E (what to capitalize)
- 2Calculate depreciation under straight-line, DDB, and sum-of-years-digits
- 3Record disposal of PP&E (gain/loss calculation)
- 4Apply impairment testing rules (recoverability test, then measurement)
- 5Distinguish between capital expenditures and repairs/maintenance