Homevestors purchased land for $400,000 in 2007. In 2019, an independent appraiser assessed the value of the land at 900,000. At what amount should the land be recorded on the company's 2019 financial statements?

Question

Quizplus · Accepted Answer

Under generally accepted accounting principles (GAAP), land and other tangible assets are recorded at their historical cost, not at their appraised value or market value. This is known as the cost principle.

Homevestors Purchased Land for $400,000 in 2007