Introduction to Reporting PP&E

What you will learn to do: Demonstrate Proper Financial Presentation of PP&E

People with notebooks and computers sitting at a table.

Companies record depreciation on all plant assets except land. Since the amount of depreciation may be relatively large, depreciation expense is often a significant factor in determining net income. For this reason, most financial statement users are interested in the amount of, and the methods used to compute, a company’s depreciation expense.

In this section, we’ll cover the most common disclosures related to PP&E, including the balance sheet presentation known as a classified balance sheet, common footnotes, and other supporting information required by GAAP.