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Leasehold Land

Triparna Banerjee (CA Finalist) (35 Points)

23 July 2008

Whether the cost of the leasehold land which has been capitalised can be amortised over the period of lease?

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5 Replies

S.Srinivasaraghavan (Chief Financial Officer and Co) (11318 Points)
Replied 23 July 2008

Yes, it can be amortised over the lease period.

Triparna Banerjee (CA Finalist) (35 Points)
Replied 24 July 2008

Originally posted by :Triparna Banerjee
	Whether the cost of the leasehold land which has been capitalised can be amortised over the period of lease?	"

Thanks for the reply. Could u please expalin it to me. As per my understanding, since it is not a depreciable asset, if the cost is amortised it means we are providing depreciation.

Triparna Banerjee (CA Finalist) (35 Points)
Replied 26 July 2008

Thanks for the reply. Could u please expalin it to me. As per my understanding, since it is not a depreciable asset, if the cost is amortised it means we are providing depreciation.

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CA Nikhil Mittal (Manager (Audit)) (77 Points)
Replied 04 August 2008

Originally posted by :Triparna Banerjee
"	Originally posted by :Triparna Banerjee Whether the cost of the leasehold land which has been capitalised can be amortised over the period of lease? " Thanks for the reply. Could u please expalin it to me. As per my understanding, since it is not a depreciable asset, if the cost is amortised it means we are providing depreciation.	"

DEAR TRIPARNA AS PER AS-19 "LEASE ACCOUNTING' THERE ARE TWO TYPE OF LEASE 1. OPREATING LEASE 2. FINANCIAL LEASE IN THE CASE OF A FINANCIAL LEASE DEPRECIATION SHOULD BE TAKEN BY THE LEASEE IN HIS BOOKS. HE SHOULD AMORTISE THAT CAPITALISED LEASEHOLD LAND AS PER THE PROVISION OF AS -19 . FOR BETTER UNDERSTANDING YOU SHOULD GO THROUGH AS-19