In accounting, a capital asset is an asset that is recorded as capital - that is, property that creates more property, e.g. a factory that creates shoes, or a forest that yields a quantity of wood. Accountancy (British English) or accounting (American English) is the process of maintaining, auditing, and processing financial information for business purposes. ... In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e. ... Capital has a number of related meanings in economics, finance and accounting. ... Ecological yield is the harvestable growth of an ecosystem. ...

Tax accounting treatment

The treatment of different types or kinds of capital asset varies very widely by jurisdiction. The GAAP only require that capital assets be treated differently from operating expenses, as the latter yield all their benefits immediately. In demonology Gaap is a mighty Prince and Great President of Hell, commanding sixty-six legions of demons. ... In throughput accounting, the cost accounting aspect of Theory of Constraints (TOC), operating expense is the money spent turning inventory into throughput. ...

In most countries a capital cost deduction applies to require or allow a purchaser to write off the cost of acquiring the asset over time. Rather than writing off the entire cost of acquisition in one year, it is written off over multiple years to reflect the fact that it is used in each year to do things and wears down or is used up or obsoleted to some degree. The period of time over which this occurs can range typically from 2 years for software to 30 years for buildings. In accounting, writing off is the expensing of a balance sheet asset that has no future benefits. ...

Management accounting treatment

Capital asset accounting is more difficult when intangibles are considered, most notably in the managing of human capital. Because some theory of value creation must be used to assess the contribution of the different elements of human capital, this is considered a management accounting problem to which few fixed standards have so far been applied. Intangibles are qualities in an individual or group of individuals, especially those organized in an official group (e. ... Human capital is a way of defining and categorizing peoples skills and abilities as used in employment and as they otherwise contribute to the economy. ... It has been suggested that this article or section be merged with Cost accounting. ...

However, rampant speculation and potential for creative accounting and accounting scandal is involved when intangibles are a large part of a company's value. Most such recent US scandals involved high-tech companies during the dotcom boom that could represent their software, teams of engineers, and loyalty of their customers, rather arbitrarily since there was little to compare it to before the Internet era. Creative accounting and earnings management are euphemisms referring to accounting practices that deviate from standard accounting practices. ... ... Dot-com (also dotcom or redundantly dot. ...

Breaking down the intangibles that go into human capital into the instructional capital followed to do things, the individual capital talent, and the social capital between them and the customers that allows them to trust each other and get things done, is an approach sometimes advised. Human capital is a way of defining and categorizing peoples skills and abilities as used in employment and as they otherwise contribute to the economy. ... Instructional capital is a term used in educational administration, to reflect capital resulting from investment in producing learning materials. ... Individual capital comprises inalienable or personal traits of persons, tied to their bodies and available only through their own free will, such as skill, creativity, enterprise, courage, capacity for moral example, non-communicable wisdom, invention or empathy, non-transferable personal trust and leadership. ... Social capital is defined as the value that is created through the application of social networks during non-organizational time. ...

In sports economics and in public sector efforts at measuring well-being, and other specialized fields there is a need to try to gauge these intangibles for a group of people in a team or a whole society. This is a very difficult issue: < [[[[math>Insert formula here</math>The public sector is that part of economic and administrative life that deals with the delivery of goods and services by and for the [[government </math></math></math></math> Direct administration funded through taxation; the delivering organisation generally has no specific requirement to meet commercial... The well-being or quality of life of a population is an important concern in economics and political science. ...

Sports example

For example, a professional sports team becomes more valuable due to their ability to coach players with training programs and rules, but those players have only so much natural talent, and the chemistry between them is important. Accordingly, the valuation of the team is very difficult, and may vary from year to year. Typically only selling the team would be a fair indication of its fair market value, and the sale itself, especially if it involved moving to another city, would drastically alter some of these factors (such as the fan base which provides the players with fame and encouragement, or the ability to attract new talent to the team). Valuation can mean: Valuation (finance) Valuation (mathematics) This is a disambiguation page — a list of articles associated with the same title. ... Fair Market Value is a term in both law and accounting to describe an appraisal based on an estimate of what a buyer would pay a seller for any piece of property, assuming neither the seller nor the buyer is under any compulsion to complete such a transaction, and that...

Common auditing

Avoiding the question of human capital and its intangibles, the focus in ISO standards for performance audits suggests that capital assets can be evaluated first for what they do and only second for what they are worth. That is, building a model of what activities or service economy or service product the capital asset supports, makes it easier to compare unlike physical goods. Consider two different ways to pollinate an orchard: by paying people to do it, or by letting bees do it. The beehive or meadow, and the road or truck, each bring in those who do the pollination, so should be treated equally. ISO has many meanings: Iso is the stem of the Latin transliteration of the Greek word ίσος (ísos, meaning equal). The iso- prefix in English derives from this and means equality or similarity. ... bullshit ... Service economy can refer to one or both of two recent economic developments. ... The Ecological Intelligent Design strategy of Michael Braungart, an ecological chemist, and Bill McDonough, an architect and designer, applies to both products and buildings. ... A flower-fly pollinating a Common Daisy (Bellis perennis) Pollination is an important step in the reproduction of seed plants: the transfer of pollen grains (male gametes) to the plant carpel, the structure that contains the ovule (female gamete). ...

The ISO 19011 standard may be a step in this direction, as it combines environmental management (for natural capital assets) with quality management (for humans) into a single audit. It is however not clearly a method suited for capital asset valuations, though it provides a framework to distinguish types of assets based on what activities they support. This would permit an activity-based costing or throughput accounting model to be quite easily constructed. ISO 19011 is a terse document that sets forth guidelines for: quality management systems auditing environmental management systems auditing Provider: International_Organization_for_Standardization The stadards offer four resources to organizations to save time, effort and money: A clear explanation of the principles of management systems auditing. ... Environmental Management is not, as the phrase suggests, the management of the environment as such but rather the management of the humankinds interaction with and impact upon the environment. ... Natural capital is a metaphor for the mineral, plant, and animal formations of the Earths biosphere when viewed as a means of production of oxygen, water filter, erosion preventer, or provider of other natural services. ... It has been suggested that this article or section be merged with Total quality management. ... An audit is an evaluation of an organization, system, process, or product. ... Activity-based costing (ABC) is a method of allocating costs to products and services. ... Throughput accounting is an alternative to cost accounting proposed by Eliyahu M. Goldratt. ...

The Natural Capitalism approach goes further and advises a single uniform way of dealing with natural capital as an asset equivalent to infrastructural capital, financial capital and human capital. Though it says nothing about how to combine these into a single total cost of operations. Natural capitalism is a set of trends and economic reforms to reward energy and material efficiency - and remove professional standards and accounting conventions that prevent such efficiencies. ... Natural capital is a metaphor for the mineral, plant, and animal formations of the Earths biosphere when viewed as a means of production of oxygen, water filter, erosion preventer, or provider of other natural services. ... Infrastructural capital refers to any physical means of production or means of protection beyond that which can be gathered or found directly in nature, i. ... Financial capital, or economic capital, is any liquid medium or mechanism that represents wealth, or other styles of capital. ... Human capital is a way of defining and categorizing peoples skills and abilities as used in employment and as they otherwise contribute to the economy. ...