Q: So Preliminary Site Costs depicted on the Fresno Properties balance sheet are considered an asset. Correct?
A: Yes. The title implies that the site(s) are not yet fully developed, and that this preliminary work will be followed by actual construction and completion of the site(s). When development is completed, these initial costs become a component of the total costs of the new, fully developed fixed asset, which is reported on the balance sheet as a long-term asset. This expectation further reinforces classifying this activity as an asset account.
Course overview: Financial Statement Structure and Composition