Bulk purchases is usually related to real estate, Land and B
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Bulk purchases is usually related to real estate, Land and Building. The purchaser pays a price for both. It is important to breakdown the price since Land is not depreciable, but it needs to be reported on the Balance Sheet.
I am certain that the calculation between land / building is of utmost importance. Are there other methods you use, such as appraisals?
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Solution Summary
Bulk purchases is usually related to real estate, Land and Building. The purchaser pays a price for both. It is important to breakdown the price since Land is not depreciable, but it needs to be reported on the Balance Sheet. The solution assists with the calculation between land/buildings. It also discusses if there are other methods you can use such as appraisals.
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Bulk purchases are generally handled in the same way that what's called lump-sum purchases or lump-sum assets are handled. Each transaction is handled separately, within the same transaction (if that makes sense at all). Let's use an example:
A company buys a building and related assets (bulk or lump-sum) for $10,000,000. The purchase included a building, the land it sits on, and all of the equipment ...
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