Land - investment property or inventory

This discussion explores the correct accounting classification for land acquired for villa construction. The key question is whether the land should be treated as inventory under IAS 2 or investment property under IAS 40. The consensus is that if the intention is clear for development and construction, it should be classified as inventory. However, if a license for construction is not obtained, an initial classification as investment property, followed by a transfer to inventory upon license approval, is a viable approach, though potential capital gains tax implications should be considered.