$1\mathrm{.}2$ Purchase of a New Farm $($parts $1-2$ only$)$

Your client has just purchased land on which it intends to open a U$-$Pick fruit and vegetable farm. In

doing so$,$ the client incurs the following costs: land surveys, costs of leveling the land, installation of

fencing and the installation of irrigation lines.

Educate your client on how the Codification differentiates between permanent land

development costs vs$.$ limited$-$life land development costs. Review the Glossary under

ASC $905-360$ for support.

Refer to industry guidance in the Codification to determine whether the costs listed below

$($a through d$)$ should be capitalized and whether they should be depreciated. Hint:

Research ASC $905-360$ specifically as it relates to recognition and subsequent

measurement.

List in the following order:

a$.$ Land surveys

b$.$ Costs of leveling the land

c$.$ Installation of fencing

d$.$ Installation of irrigation lines

Make sure to cite the proper Codification reference for each part $($#$1-2)$ of your responses

above as follows: FASB ASC $(xxx)-(YY)-(ZZ)-(PP)$

$1\mathrm{.}12$ Goodwill Accounting Alternative $($parts $1-3$ only$)$

An "accounting alternative" is available within the Goodwill topic of the Codification specifically as it

relates to the subsequent measurement of goodwill $($ASC $350-20-35-??).$ Locate this alternative

and explain:

What measurement approach does the accounting alternative permit?

What types of companies are eligible to apply this accounting alternative and where did

you locate this information?

How does the accounting alternative differ from the measurement requirements for

companies that do not $($or cannot$)$ elect this treatment? In other words, if you cannot elect

the accounting alternative, what subsequent measurement requirement for goodwill are

you expected to follow?

Make sure to cite the proper Codification reference for each part $($#$1-3)$ of your responses

above as follows: FASB ASC $(xxx)-(YY)-(ZZ)-(PP)$