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capitalisation of road

CS Asmita Mehta (CS) (308 Points)

10 April 2009

Can road constructed on government land be capitalised ?

Plz give your answer in the light of relevent A.S.

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NANDURI RAVI SURYA NARAYANA MU (ACCOUNTANT) (194 Points)
Replied 12 April 2009

Hi, Nikita,

First of all that road construct on the Government Land, ok On what basis you construct road on the land. It you took land on lease from the Government, you can not capitalise the Road. Or else, because you are getting some fee viz tollplaza and other things you get some income on that. In this you can follow the works contract. The Government granting the land to the company on that compnay land you construct road for the fesibility of infrastructure development you can capitalise.

In my openion it is not fall under the self construction of fixed assets. It is under improvements of your own infrastructure.

Let me know the full details pls.