152-031 - Supermarket Building

This paper analyses the records to be kept for a building that is purchased for use as a supermarket but the comments contained in the paper could be utilised for any building that is being purchased as a retail building.

The paper considers a number of activities including:

• purchase of a supermarket building and the type of key issues that should be taken into account in determining whether the building is a suitable building for the conduct of the business from it, in this case the paper considers the building as a supermarket building;
• what is the zoning;
• is the location correct;
• what traffic counts have been obtained for the building;
• what pedestrian counts;
• where are competitors buildings situated;
• are there adequate parking facilities;
• what is the age of the building;
• what building allowances are available under the income tax act;
• what plant and equipment is included in the supermarket building;
• review of depreciation;
• comment on any repairs and maintenance undertaken within 12 months of acquisition;
• is the ownership of the building by the most suitable entity;
• where is the title deed;
• is the building properly insured;
• what valuations have been obtained;
• how is the building entered in the business' balance sheet;
• have GST issues been properly considered;
• brief commentary on capital gains tax is included;
• the concept of treating the building as a profit centre is also discussed.

The paper is linked to the Capital Gains Tax - Introduction Paper.