Treatment of land

Query:

A Real Estate Company has acquired certain land and started working on that land.My question is what should be the accounting treatment of Land and the Cost that has been incurred on land till the date the projects gets completed?

CAn anyone help me in this regard?pleas support yr answer with certain supportings?if possible ?

Replies (4)

Purchase of land and development cost shoulb be shown as direct cost.If nothing is sold at year end 

then the same should be considered as Closing stock after considering AS 2

The projects gets completed after 4 years

Whether shuld i show the land cost and development cost under Capital/Construction work in progress

If the project is of type that after completion of project ,everything will be sold out and it is your main business then it should be shown as Direct cost (Revenue Exp) ,but not Capital WIP(Capital EXP),Since it is a good/stock to the company

 

If the Project is Apartment /Commercial Building and the objective of the business is to rent the same after completion of project ,then the said exp is of Capital Nature(Asset to Company) and same should be shown as Capital WIP

 

 

Thanks Mr.Prasad.

yes thats the main business as it is a real estate company.

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 07 October 2026
Article Trainee/ CMA Trainee

RMA And Associates LLP

New Delhi

CA Inter

View Details
Company
Featured 29 October 2026
Accounts Executive

Synergy Keystone

Chennai

B.Com

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details
Company
Featured ARTICLESHIP 28 October 2026
CA- Inter and Articles

N N V Satish & Co.,

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 28 October 2026
Article assistants

Shyam S Gupta and Company

New Delhi

CA Inter

View Details
Company
14 October 2026
GST & TDS ASSISTANT

AGGARWAL SANJAY & ASSOCIATES

New Delhi

B.Com

View Details