Hi,

I'm trying to decide how to categorize an item in the capital expenses of a transit service. I've found the industry input for all but one, Land. In one of the years I'm analyzing, the spent a very large amount on acquiring some land for the transit system and I don't know what to put that amount under. Can someone help me understand what this should go under?

Thanks

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4 comments

  • Official comment

    Hello Ian!

    Generally speaking, the sale of the land has very little impact on the economy. This is because land sales are considered asset transfers, where one person receives money while the other receives tangible property. Thus, the land sale itself has no value in IMPLAN. Some small impact may be captured however, by creating an Event for real estate fees, and for large commercial projects, legal fees.

     

    Best,

    Michael Nealy

  • Thank you, Michael. That helps a lot. I suspected this could be the case, but I'm new to IMPLAN and wanted to be certain.

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  • As a follow up, I understand land sales as asset transfers.  If I have a $10 million land sale, and the economic impact of the real estate fees is $xxx, then would I still include the original $10 million in the "Total Economic Output" reported = $10.xxx million?  

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  • Hello Margaret!

    For all Industries, Output is equal to the value of production. As is hinted to above, the land sale itself does not generate any change to an Industry's production (outside of the impact of real estate fees and legal fees for larger commercial projects), so I would caution against reporting a summed value as you have described. You could certainly include the land sale value when reporting the Results, but this should be as a standalone value separate from Output. 

     

    Best,

    Michael Nealy

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