CA Student
6149 Points
Joined March 2009
In my view, depreciation is not calculated on land because it has unlimited useful life. Depreciation is aimed at spreading the cost of an asset over its economical useful life. But in case of land we can't estimate its useful life, hence its not possible to calculate depreciation on land. However, if any land improvement cost occurs, then such cost can be allocated to its useful accounting periods. Also in case of quarries, land can be depleted. Also AS-6 does not cover land. Let others too comment.