Real Estate
Land and Building Cost Allocation
Splitting a lump-sum property purchase price between land and building based on an independent valuation.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Land | Asset (+) | 300,000.00 | - |
| Building | Asset (+) | 700,000.00 | - |
| Cash / Bank | Asset (-) | - | 1,000,000.00 |
💡 Accountant's Note
Land and building must be recorded separately. Land is never depreciated under IAS 16, so this split is critical for accurate depreciation calculations. The allocation is typically based on a professional valuer's report.
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