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Land development cost

Others 384 views 1 replies
can anybody explain about land development cost as it forms fixed asset...

if in that land itself if we Incurr some expenditure relating to construction can it be land development cost...
or it will be the expenses incurred for that....
Replies (1)

Incremental borrowing costs are capitalised, other costs are expensed eg. repairs.

Development costs or real estate development expenditure is not dealt by AS 10. 

AS 10.12 improvement construction costs can be added to the gross fixed asset value if future economic benefit is there. So, this building has future benefits if your generating cash from it eg, additional class rooms. Hence, can be added to the gross block value. 

Land development costs cannot be fixed asset value. Please go through this standard because initial treatment and subsequent treatment is clearly prescribed here: https://www.mca.gov.in/Ministry/notification/pdf/AS_10.pdf


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