FAR 3.4 - PP&E Cost Basis

Question 1

PPE is recorded at historical cost, however how are donated dined assets recorded?

Answer 1

Fair market value and result in a gain on the income statement

Question 2

When land has been purchased for the purpose of constructing a building, all cots incurred up to what are considered land costs?

Answer 2

All costs incurred up to excavation for the new building

Question 3

Land improvements are depreciable and include:

Answer 3

Fences
Water systems
Sidewalks
Paving
Landscaping
Lighting

Question 4

When preparing land for construction of a building, how are the following costs designated between land cost and building cost:

Filing in a hole or leveling
Digging a hole for the foundation

Answer 4

Filing in a hole or leveling = land costs
Digging a hole for the foundation = building cost