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

Aditya (-) (44 Points)

20 January 2022  

The company is in the business of construction buildings and leasing them for use. Essentially, their revenue source is lease rent. Question is the material and furniture they purchase for construction of these buildings, which have not been used yet, should be recognised as inventory as per AS 2 or fixed asset as per AS 10 (Ind AS not applicable)? Thanks.