 | Term | Definition |
| |
land |
purchase price + commissions + legal fees + escrow fees + surveyng fees + clearing and grading costs |
| |
land improvements |
cost of improvements + expenditures for materials, labor, and overhead |
| |
buildings |
purchase price + commissions + reconditoning costs |
| |
equipment |
purchase price + taxes + freight + insurance + installation + any expenditures incurred in preparing the asset for its intended use. (e.g. reconditioning and testing costs) |
| |
asset from a basket purchase |
(cost of basket purchase) * (fair market value of asset) / (fair market value of all the assets included in the basket purchase) |
| |
straight line depreciation |
(cost - salvage value) / estimated useful life |
| |
units-of-production depreciation |
number of units used * ((cost - salvage value)/ estimated life in units) |
| |
depletion |
amount of resource used * (cost of resource) / (total amount of resource available) |
| |
amortization |
cost of asset/useful life of asset |
| |
goodwill |
purchase price of a company's assets - fair market value of company's assets |
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