$1\mathrm{.}2$ 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.

$1.$ 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.

$2.$ 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$)$