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Never To find a a depreciation for Lands (True or False)?
Excellent Participation … Let us discuss this. Basically the statement is true. However, In Some Cases, The Value of The land could be reduced . As a result we should consider this reduction in the value for the land. For example the land that has Mines of Gold, Iron, Silver..etc.. As long as we are taking these great materials, The value of the land will reduce for sure.
Another example is the land which surrounded with water of the seas, Oceans or rivers…etc. In many cases theses areas of lands also reduced by size on daily basis because of the water that covers the lands… The same, the value will reduced and we should consider this issue..
So, what we are actually making, is to use what we call “Depletion Expense” to record for this reduction periodically . This is the same as the depreciation Expense . Thank You
Thanks for asking.
Land never depreciate, as Land is assumed to unlimited life.
It's True !!
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.
Best Regards ,
SHAMEEM
wait more details from our experts
Thanks for Invite...
Agree with Experts Answer : Presently Land is not depreciated , it have unlimited life
It is a very elementary question. Lands are not depreciated. The essence of depreciation is that Properties, Plants, and equipments value drop as there expected productivity decline and maintenance increase. thus the expected demand for it and net fair value drop. However, lands are not a structured or manufactured thus it is not subject to elements that lead deterioration in condition. this all is in coherence with the continuity assumption as well as IAS 16.
Normally land value getting increased time to time. When I was a student, we were proving depreciation on land & building. but when i came to my practical life and experience, I haven't yet seen depreciation for land. May be it is because of the increase of land value and indefinite life.
.... True................................
Hello Team,
Land is not depreciated because land is assumed to have an unlimited useful life.Other long-lived assets such as land improvements, buildings, furnishings, equipment, etc. have limited useful lives. Therefore, the costs of those assets must be allocated to those limited accounting periods. Since land's life is not limited, there is no need to allocate the cost of land to any accounting periods.
Regards,
Saiyid
Land might get depreciated. As the accounting standards future is uncertain.
Situations like war might take place. As financial adviser W.D. Gann stated there shall be wars as long as humanity exists.
A natural disaster might bring down the value of land tendering it unusable.
Apart from this companies dealing in agriculture production might face a decrease in the value of land when its fertility gets reduced.
There can be many such situations.
