When assets are acquired as a "package," the cost of each asset is based on its proportion of fair market value to the total fair market value of the "package."

Question

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When assets are acquired together as a package, the individual cost of each asset is determined by allocating the total cost paid for the package based on the relative fair market values of the assets included in the package. This method ensures that the cost allocated to each asset reflects its proportionate value in the context of the total acquisition.

When Assets Are Acquired as a "Package," the Cost of Each