Lump-sum asset acquisition

A bundled price does not make land, buildings, and equipment one perpetual accounting unit. Their service patterns, depreciation, impairment, and disposal paths differ, so the acquisition file needs a supported allocation.

For a $900,000 bundle with supplied supported values of $300,000 for land, $600,000 for a building, and $100,000 for equipment, the relative-value base is $1,000,000. The assignments are $270,000, $540,000, and $90,000. The three amounts reconcile to the negotiated $900,000; the $100,000 difference between the value base and the price is not recorded as a free-standing loss or gain.

The denominator and asset identities matter more than the arithmetic. Equal division, a seller's unlabeled schedule, or management preference is not a substitute for supported values. When a required value is missing or not reliable, the correct response is an evidence request or current-authority research, not a fabricated percentage.

ASC 360-10-30-1 supports the historical-cost starting point for an acquired long-lived asset. It does not prescribe the relative-value method used in this exercise. The exercise supplies that method and a common value basis so the learner can practice a controlled allocation without claiming a broader rule.

Use one denominator for every asset. Keep full precision through the calculation, round only the recorded amounts, and assign any small rounding remainder under a stated policy. Then confirm that the assigned costs sum to the bundle price. The Linden Peak worked example shows the control. The independent Summit Works practice uses different facts.