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Land purchased previous query

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MPR Sanjay Kumar

1675 Points Posted on 25 January 2023

honourable persons,

I bought land on 31.10.2006 on that time the value is RS 30,000

1066 sqft

now while iam preparing balance sheet 2020 March means how and which value should disclose?? plse tell me

Replies (3)

Quick Summary

This discussion clarifies how to present the value of land purchased in 2006 on a March 2020 balance sheet. Generally, land value remains unchanged as depreciation isn't applicable. However, if accounting standards (AS or Ind AS) permit revaluation, you can disclose the current or revalued amount by creating a revaluation reserve. Any expenses incurred to upkeep the land between 2006 and 2020 should also be capitalised, potentially increasing its disclosed value.

prasad Nilugal

GST Practitioner & Accounts

8996 Points Posted on 25 January 2023

Depreciation on land is not applicable, therefore no change in the value of the land as on March 2020 , however if As or Ind As permits for revaluation of land then , then you have to show current or revalued fingers in balance sheet of 2020 , by creating revaluation reserve , because value of land as always increasing.
Also you have to Capitalize all the expenses to incurred during the period 2006 to 2020 to upkeep the land. So value of land may increase due to revaluation and Capitalization of the expenses. otherwise value of land remain same, you have to refer AS or IndAs whichever is applicable in this Case.