Treatment of expenditure on leased land
This query is : Resolved
10 November 2011
Hi,
Our co. has taken a land on lease for 12 years. Co. has incurred Rs. 5 lakhs approx on the filling of land and other land improvement cost. Apart from the above monthly lease rent of Rs. 30000/- is also being paid by the co. What should be the treatment of above expenditure of Rs. 5 lakhs? Whether this should be taken as fixed asset in the books of account or shall be written off over the lease period. If it is to be written off please tell that the balance portion shall be presented under which head in the balance sheet?
Looking forward to an early reply from all.
Our co. has taken a land on lease for 12 years. Co. has incurred Rs. 5 lakhs approx on the filling of land and other land improvement cost. Apart from the above monthly lease rent of Rs. 30000/- is also being paid by the co. What should be the treatment of above expenditure of Rs. 5 lakhs? Whether this should be taken as fixed asset in the books of account or shall be written off over the lease period. If it is to be written off please tell that the balance portion shall be presented under which head in the balance sheet?
Looking forward to an early reply from all.
12 November 2011
AMIT,
RS 5 LAC SHOULD BE WRITTEN OFF WITH THE COST OF LEASE LAND WITH IN 12 YEARS.
AND IT SHOULD BE SHOWN IN BALANCE SHEET UNDER FIXIED ASSETS WITH LESS VALUE.
RS 5 LAC SHOULD BE WRITTEN OFF WITH THE COST OF LEASE LAND WITH IN 12 YEARS.
AND IT SHOULD BE SHOWN IN BALANCE SHEET UNDER FIXIED ASSETS WITH LESS VALUE.
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