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when long-lived assets are purchased with a loan, can a company report the net difference between the cost of the asset and the mortgage liability against the asset, instead of reporting the two amounts separately on the balance sheet?

For example, if the cost of the building is $10 million and the loan used in purchasing the building is $8 million, could the company report only $2 million as an asset on the balance sheet? Why or why not?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9416062

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