Intermediate Accounting 8 Property, Plant And Equipment I. Classification as property, plant and equipment To be included in the property, plant, and equipment category, an asset must have three characteristics:
There is generally a higher degree of uncertainty regarding the future benefits that may be derived. Their value is subject to wider fluctuations because it may depend to a considerable extent on competitive conditions
1. Reasons for Issuance of LongTerm Liabilities Debt financing may be the only availablesource of funds. Debt financing may have a lower cost. Debt financing offers an income taxadvantage. The voting privilege is not shared. Debt financing offers the opportunity forleverage