Should college and university recognize depreciation expense

Reference no: EM131317684

DEFICIT BUDGET?
In July 2003, the Medical College of Ohio (MCO) (now part of the University of Toledo) approved its first deficit budget of $3.4 million, but no programs or faculty members were cut. MCO announced a "mission-based" study of all programs and an examination of how financially viable they are, as well as how essential they are MCO was projected to lose money because of recognizing depreciation expense. Without depreciation expense, MCO would have a $5 million profit for fiscal year 2004.

In recognizing depreciation expense, MCO was adopting a new accounting standard passed in 2000 that requires colleges (universities) to account for depreciation. Many colleges adopted the new standard by disclosing in a note in their audited financial statements, not their operating budgets.

Required

a. In your opinion, should colleges and universities recognize depreciation expense? Comment.

b. Is recognizing depreciation expense in a note equivalent to recognizing depreciation expense in the statements? Comment.

c. Should the standard be explicit on how a college or university recognizes depreciation expense? Comment.

Reference no: EM131317684

Questions Cloud

What is the basic personal financial statement : May personal financial statements be prepared only for an individual? Comment.- What is the basic personal financial statement?

Find the approximate magnetic flux density : A square loop of wire of sides 0.01 m lies in the xy-plane, with its sides parallel to the x- and y-axes and with its center at the origin. It carries a current of 1 A in the clockwise sense as seen along the positive z-axis.

External borrowing opportunities : Company X wants to borrow $10,000,000 floating for 5 years; company Y wants to borrow $10,000,000 fixed for 5 years. Their external borrowing opportunities are as follows.

Write a program that allows the user to enter two integers : Write a program that allows the user to enter two integers and a character. If the character is A, add the two integers. If it is S, subtract the second integer from the first. If it is M, multiply the integers.

Should college and university recognize depreciation expense : In your opinion, should colleges and universities recognize depreciation expense? Comment.- Is recognizing depreciation expense in a note equivalent to recognizing depreciation expense in the statements? Comment.

Find the value of q for which the angle made by the strings : Two point charges each of mass m and charge q are suspended by strings of length l from a common point. Find the value of q for which the angle made by the strings at the common point is 90°.

List the step performed and include screen shot of execution : Create user user2 - list the steps performed and include screen shot of successful execution. When you logged on as system make user1 account password expire. -include SQL query.

What is the tax on a 100,000 home : If property tax on a $200,000 home is 3,090. What is the tax on a 100,000 home?

How would the county account for given million expenditure : DaimlerChrysler completed its first year of production of the Jeep Liberty in 2001.- How would the county account for its $2 million expenditure?

User Account

All Pages