09 February 2013
A Company purchased a land together with building for a consideration (say Rs.1 crore). No separate value allotted to Land & Building in the Sale deed.
How to allocate the cost between land & building for capitalisation in the books of accounts as per AS-10?
11 February 2013
you cannot allocate because you cannot separate the building from the Land and the same is also beneficial for you because you can claim depreciation on that value.
11 February 2013
I don't think it is possible to claim depreciation on the entire amount. You have to classify it.
As per Accounting Standard-10, if several assets are purchased for a consolidated price, assets should be accounted at FAIR MARKET VALUE as determined by competent VALUER.
So, the value can be split between land & building.
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