Lease Land but without Consideration
This query is : Resolved
Guest
Guest
(Querist)
08 June 2010
What will be the treatment of the leased land if we got it without consideration.
An Goverment Authority gave land to use it for 5 years but did not take any consideration, only lease rent of Rs.3 lacs per annum is to be given.
Now my question how to treat this land in the balance sheet, since AS 19 does not apply on leased land and without consideration we can not show it in the balance sheet.
An Goverment Authority gave land to use it for 5 years but did not take any consideration, only lease rent of Rs.3 lacs per annum is to be given.
Now my question how to treat this land in the balance sheet, since AS 19 does not apply on leased land and without consideration we can not show it in the balance sheet.
CA. Tarun Navlani
(Expert)
10 June 2010
Hello Sanyam,
Though AS 19 does not cover lease of land, we can take guidance from relevant IFRS. Corresponding IAS requires that lease of land is always to be classified as operating lease unless the land has finite useful life.
Thus, you should recognise total lease rent payable during the lease tenure on straight line basis i.e. charge Rs. 3 lacs to P & L Account every year. No disclosure to be made in Balance sheet in case of operating lease.
Though AS 19 does not cover lease of land, we can take guidance from relevant IFRS. Corresponding IAS requires that lease of land is always to be classified as operating lease unless the land has finite useful life.
Thus, you should recognise total lease rent payable during the lease tenure on straight line basis i.e. charge Rs. 3 lacs to P & L Account every year. No disclosure to be made in Balance sheet in case of operating lease.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST on reimbursement of expenses
- Query on effect of registration of property
- Visiting card purchase
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Foriegn assets disclosure
- Wrong CMPo8 file
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Whether output tax is taken credit by purchaser
- Equity Share Sale and Purchase
- Additional trade name
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
