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Posted by Seth on September 27, 2008, 2:24 pm
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>If company A buys from company B a large lot of products (some new and some
>used) for $X, and the invoice does not break down value of individual items
>in the lot, is company A allowed to assign values as it likes to those
>individual line items?
Yes. It may have to justify the values if it's challenged.
>Assume three different cases in answering this:
>
>1) Items are expensed and used in operations immediately
All of them? Then it doesn't matter, does it?
>2) Items are capitalized
If they're in different depreciation categories, it matters.
>3) Items are purchase for resale (inventory)
If they're all sold, it ends up not mattering (depending on when
they're sold, it might matter on a time unit basis).
Seth
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