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Land Equity
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alkali flats
Posted 1/21/2018 08:47 (#6520435 - in reply to #6519619)
Subject: RE: Land Equity



Eastern Nebraska
piratepride2 - 1/20/2018 18:46

Question for you all

When computing balance sheets and other financials, do you guys use market value or purchase price for your asset value? If you purchase ground for say $3000/acre and the land was appraised or valued at $4500/acre, which value do you all use for your asset. I know the liabilities have to be the purchase amount/financed amount. If you use market value do you immediately have $1500/acre in land equity?

I only value land on the balance sheet as high as needed to keep my banker happy. Its a lot easier to raise it if the need for more credit arises.
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