The town of Columbia gave a piece of land to Wind Energy,Inc.so that the company would build its new factory in Columbia and create many local jobs.One appraiser said the land was worth $200,000,while a second appraiser said the land was worth $220,000.If Wind Energy,Inc.records the land at $200,000,this accounting choice would be considered ________.

Question

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Recording the land at the lower appraised value of $200,000 is considered a conservative approach to accounting, as it results in a lower asset value and likely lower reported profits.

The Town of Columbia Gave a Piece of Land to Wind