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treatment of land purchased at lease

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Querist : Anonymous

Querist : Anonymous (Querist)

23 January 2011 if i bought a land for 90 yrs of lease whether it should be treated as fixed asset in books or treatment should be different.

Vivek Raju P

Vivek Raju P (Expert)
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23 January 2011 Land is never a finance lease unless title passes to the lessee at the end of the lease term.

It still has to be considered as an operating lease. Cannot be capitalised in your books.

Querist : Anonymous

Querist : Anonymous (Querist)

23 January 2011 then Mr vivek what should be the treatment for a real estate company who took it on lease and going to construct residential flats on it for sale.

Manoj Sachdeva

Manoj Sachdeva (Expert)
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23 January 2011 In the Books of the LESSEES :Finance Leases are to be recognised as asset and liabilities at amounts equal to the fair value of the leased property

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