Leasehold Land

Yes, it can be amortised over the lease period.

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.

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.

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

But AS-19 on Leases is not applicable for Land right? The very first paragraph on scope of the standard says that:

Scope (para 1(c))

1. This statement should be applied in accounting for all leases other than:

a) lease agreements to explore for or use natural resources, such as oil, gas, timber, metals and other mineral rights; and

b) licensing agreements for items such as motion picture films, video recordings, plays, manuscriptts, patents and copyrights; and

c) lease agreements to use lands.