On August 16, 1997, Parson Corp. purchased 20 acres of land for $500,000. The land has been held for a future plant site until the current date, December 31, 2012. On December 5, 2012, Overland, Inc., purchased 20 acres of land for $3,000,000 to be used for a distribution center. The Overland land is located next to the Parson Corp. land. Thus, both Parson Corp. and Overland, Inc., own nearly identical pieces of land.
1. What are the valuations of land on the balance sheets of Parson Corp. and Overland, Inc., using generally accepted accounting principles?
2. How might fair value accounting aid comparability when evaluating these two companies?