Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

Generally, what method do you prefer for depreciating a land?

1. Straight Line 2. Reducing Balance 3. Other method

user-image
Question added by Mohammad Ashfaq , Financial Controller , Union COOP
Date Posted: 2013/05/04
Khaja Moinuddin
by Khaja Moinuddin , Group Assistant Financial Controller , Confidential

You cannot depreciate the cost of land because land does not wear out, become obsolete, or get used up.
The cost of land generally includes the cost of clearing, grading, planting, and landscaping.
Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use.
These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property.
You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment.
You also can depreciate certain intangible property, such as patents, copyrights, and computer software.

Aya Barad
by Aya Barad , Writer , Al Manara

You are correct.
Land is not depreciated because land is assumed to have an unlimited useful life.

Nouman Masood
by Nouman Masood , General Accountant , Ascend Advance Health Care Solutions

land is not depreciated as its has indefinite useful life

Kokab Rahman
by Kokab Rahman , Managing Director, Head of Business Development , Radeya Business Services http://www.radeya.biz

Land is an asset that does not depreciate.
So no depreciation method is used for land.

Mohamed Esam Mohamed Kamel
by Mohamed Esam Mohamed Kamel , Financial Analyst , Egyptian Water & Wastewater Regulatory Agency (EWRA)

Although many think that "Land" is not depreciable, land can be depreciated if it's planted (Agriculture land).

mukkur srinivasan varadhan
by mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice

Land as such is not a depreciable asset.But developed land can be depreciated to the extent of the development.

Md Shahidul Islam
by Md Shahidul Islam , Head of Finance & Accounts , Abdul Monem Limited (Coca-Cola)

Land is a type of asset which has no end of use.
It is not diminished by way use.
In economic sense, land has a limited supply and unlimited demand also known as infinite demand elasticity.
So, such kind of assets do not lose their economic benefit by use or expiration of time.
That's why no issue to be depreciated.
Depreciation is charged to assets which has a limited economic benefits or lose its economic benefit on use.

Azhar Muhammad Aslam
by Azhar Muhammad Aslam , Project Accountant , Mansour Al Mosaid Co.

Mostly land prices is appreciated So we do not depreciate the land.

SALIK RAFIQUE
by SALIK RAFIQUE , Lecturer , PAC Group of Colleges

Depreciation is not charged on land .

Rehan Qureshi
by Rehan Qureshi , Financial Consultant , Self Employeed

Normally Land canot be depreciated rather it can be appriciated......

Muhammad Shahzad Shamim
by Muhammad Shahzad Shamim , FC Collegiate

Normally in most of the teritories Land is alloted as Free-hold property and moreover it is not subjected to be deteriorated physically.... however in converse situation it should be depreciated.

More Questions Like This