Is it right to capitalize a building on leased land
saji varghese (Accountant) (35 Points)
04 June 2014Is it right to capitalize a building on leased land
Rajagopalakrishnan R
(PARTNER)
(1422 Points)
Replied 05 June 2014
It is perfectly acceptable to capitalise a buidling which is constructed on leased land. However, in estimating the useful life, terms and conditions in the lease agreement must also be considered. For eg If the lease is for 20 years and not renewable after that then the life of the building must be restricted to 20 years.
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