Valuation of inventories for land

In my opinion It will claimed as expense Coz Land here is stock in trade.

whereas if it will be an Asset then it wil treated as part of asset bcoz as expenditure borne on asset upto put to use is incuded as capital expenditure on asset purchase.

Agree with @ rinsss

it should be treated as revenue expenditure & it will directly goes to p&l....
 

AGREE WITH PRAMOD

Well i believe that brokerage paid is a part of cost incurred for bringning the inventories to their present location and condition. Since, brokerage is an inherent cost for buying inventories so it should be strictly considered as a part of cost of land irrespective of the fact  that it is for inventory purpose or for asset purpose.

In case of inventories these costs will automatically goes to income statement when they are sold off by the entity. Until then, it forms the partof cost of land.

Dont you guys think it should be treated like freight and carriage cost in case of purcahse of raw materials???

It should be treated as revenue expenditure and can not be treated as freight to capitalized...

Revenue Expenditure.

Have done some research on above and agree that it should be treated as Revenue Expenditure... Thank you mates...

Hi my view of capitalising the brokerage to the cost of land is based on the current indian accounting standards and international accounting standards.

I would appreciate if some one can share the standard/ guidance issued by the competent authority for proving this expense to be of revenue nature.

But if i dont pay the brokerage to the broker he can not stop the transfer of title, he can only file a suit for non payment. i.e brokerage need not necessarily brings the inventories to their present location and condition. here even if i dont pay brokerage  i will get the land

Pls explain the above situation