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<p style="text-align:left;"><span><span>There was a question about land depreciation as a fixed asset I called to answer it, although it is not a new question, but answers were a measure of variation so I decided to invite fellows to participate in the exchange of views on the question, then I decided to re-question again differently:</span></span></p> <p> </p> <p style="text-align:left;"><span><span><span>-</span></span></span><span><span>"Land" and buildings on it, which is calculated by the depreciation in this case</span></span></p> <p> </p> <p style="text-align:left;"><span><span><span>-</span></span></span><span><span>"Land" has oil wells, which is calculated by the depreciation of raw materials inside land or the land itself</span></span></p> <p> </p> <p style="text-align:left;"><span><span><span>-</span></span></span><span><span>"Land," used for agricultural, which is calculated by the depreciation of agricultural soils or the land itself</span></span></p> <p> </p> <p style="text-align:left;"><span><span>From my point of view that the land does not depreciate, but depreciation is calculated on what it has above or under it</span></span></p> <p> </p> <p style="text-align:left;"><span><span>Where buildings can be removed and re- construction of new</span></span></p> <p> </p> <p style="text-align:left;"><span><span>Agricultural soil where it can be raised and re-fertilization of New</span></span></p> <p> </p> <p style="text-align:left;"><span><span>Wells "if they were found in the sea Is Sea will be depreciated"</span></span></p> <p> </p> <p style="text-align:left;"><span><span>Thank you for your cooperation and participation opinion</span></span></p>
Land and buildings have to be treated differently as far as depreciation is concerned. Practically, the land value appreciates which we all see in our daily life whereas the building value depreciates as it becomes old and loses its strength. Due to this, while purchasing any existing building we all forced to question as to how many years old this building is ? That means it is depreciable asset as its value eroded due to passage or over a period of time. (Recap - Meaning of Depreciation -obsolescence or effluxion or passage of time).
Depreciable asset are those :
1) Which are expected to be used during more than one accounting period.
2) Have limited useful life.
3) Are held by any enterprise for use in the production or supply of goods and services and not for the purpose of sale during course of business.
4) Depreciation is an assessment and allocation on a systematic basis to each accounting period during the useful life of the asset.
Hence, As per the Accounting Standard issued by ICAI, Land cannot be depreciate unless it has limited useful life for an enterprise or organisation. Disclosure of accounting policy for depreciation accounting is very much essential to appreciate the view presented in financial statements.
Yes, I agree the Land and Buidling is been evaluated differently.
The land is generally revaluated annually and get appreciated or depreciated accordingly. While the buidling on that specific land get depreciated quarterly as per regulatory requirements or the estimated life of the buildling.
Similarly the land revaluation method is to be followed as per real estate market and IAS accounting standards.
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as per AS6 ,The land asset is not depreciated, because it is considered to have an infinite useful life. This makes land unique among all asset types; it is the only one for which depreciation is prohibited.Nearly all fixed assets have a useful life, after which they no longer contribute to the operations of a company or they stop generating revenue. During this useful life, they are depreciated, which reduces their cost to what they are supposed to be worth at the end of their useful lives (which is known as salvage value)... so it is wrong to apply deprecation on land..
Agreed with the answer brother Mohammed
land is a fixed asset, appreciation or depreciation needs to be considered as per accounting practices and market valuation
Land and buildings have to be treated differently as far as depreciation is concerned. The land is generally revaluated annually and get appreciated or depreciated accordingly. While the buidling on that specific land get depreciated quarterly as per regulatory requirements or the estimated life of the buildling.
Similarly the land revaluation method is to be followed as per real estate market and IAS accounting standards.
The land asset is not depreciated, because it is considered to have an infinite useful life. This makes land unique among all asset types; it is the only one for which depreciation is prohibited.Nearly all fixed assets have a useful life, Practically, the land value appreciates which we all see in our daily life whereas the building value depreciates as it becomes old and loses its strength. Due to this, while purchasing any existing building we all forced to question as to how many years old this building is ? That means it is depreciable asset as its value eroded due to passage or over a period of time. (Recap - Meaning of Depreciation -obsolescence or effluxion or passage Depreciable asset are those :
1) Which are expected to be used during more than one accounting period.
2) Have limited useful life.
3) Are held by any enterprise for use in the production or supply of goods and services and not for the purpose of sale during course of business.
4) Depreciation is an assessment and allocation on a systematic basis to each accounting period during the useful life of the asset.of time).
Hence, As per the Accounting Standard issued by ICAI, Land cannot be depreciate
Building and land are different asset. Building should be depriciated but not land.
LA DEPRECIATION DE LA TERRE COMME UNE IMMOBILISATION JE REPOND OUI PAR CE QUE QUI CHERCHE TROUVE LE BIEN AUSSI
Land is not depreciate because it have unlimited useful life. if a land has limited useful life then it is accaptible to depricate on its useful life.
