ACCTG 101 Lecture Notes - Lecture 29: Impaired Asset, Capital Asset, Retained Earnings
Document Summary
Closing costs (title, legal and transfer fees) Costs of getting land ready for use (such as removal of old building less salvage value, clearing, grading, filling and draining) Sale of salvaged materials reduces cost of land. Special assessments for local improvements (e. g. utilities) are part of land cost. All costs directly related to buying or constructing the building. The removal of an old building previously owned and used increases loss on the disposal of the old building. If land is purchased with an old building on it, any demolition cost less salvage value is charged to land. A building purchased for speculative purposes is not a capital asset as it is not being used in normal operations. The building is more appropriately classified as an investment. Under ifrs, companies have the following choices: For investment property assets: cm or fvm. For other pp&e assets: cm or rm. Fair value at the date of revaluation, less.
