Whether material to be used in construction of fixed asset to be grouped as inventory or fixed asset

This discussion explores the correct accounting treatment for materials and furniture purchased for constructing buildings intended for lease. The core question is whether these items, prior to use, should be classified as inventory under AS 2 or as fixed assets under AS 10. While some suggest classifying them under 'Construction in Progress' and capitalising them as fixed assets, others argue that since the company's primary income is from lease rent, not construction services, these materials should be treated as inventory.