A company has purchased a tract of land. It expects to
build a production plant on the land in approximately
5 years.?

Question

During the5 years before construction, the

land will be idle. The land should be reported as:

a. property, plant, and equipment.

b. land expense.

c. a long-term investment.

d. an intangible asset.

Ramon Quedit · Answer

Property, Plant & Eqipment.

Jafar Ali Wahed Mohammed · Answer

a. Poperty, Plant and Equipemnet because

i. IAS 16 specifically requires it to be classified as such.

ii. there is no other Accounting Standard requiring disclosure of the same alternatively.