Land value - Accounting treatment

Hi Sir or Madam

We are preparing financials to produce to bank

in the balance sheet Land value is 10 lacs

however the government value as per valuation certificate is 25 lacs

our proprietor asked us to revise the land value to 25 lacs in tally

is it a correct accounting practice to revise the land value as per valuation certificate

As I have some Idea that the Fixed assets should be carried based on historical cost

Thanks in advance
Replies (4)
Quick Summary
This discussion explores the accounting treatment of land value on a balance sheet. The main question is whether to record land at its historical cost or a more recent government valuation certificate. While some argue for sticking to historical cost for fixed assets, others suggest revaluation is permissible, especially if company policy allows. It's noted that revaluation can inflate profits and asset values, and a certified valuer's report is typically required. Ultimately, the decision should align with company policy and be discussed with the proprietor.

As per my view, its worng.
Any land valuation to be done as per certified valuer.

It's not bad. Land is revalued most of the time.

If your company policy is at cost, then its historical cost.

What happens is financial statements will become big if we follow revaluation brcause land value usually grows

You can maintain as per book value.

If You want more value of the asset then it will through land valuation and keep/submit the valuation report where you need...
No need to increase the land value in books. Bcoz, it is increasing profit value...

Consider the matter with Your Proprietor.

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