why land is not depreciated.........?
Answers were Sorted based on User's Feedback
Answer / h.r. sreepada bhagi
Depreciation is charged on fixed assets to account the
reduction in their value due to use, passage of time,
obsolescence, etc. Assumption (Fact also) is that after some
years the assets will become useless & they will not be
useful for the business.
Contrary to this land will never cease to exist. it remains
there forever and remain useful. It's value will not
generally come down. Hence it's not depreciated and usually
shown at cost of acquisition. However, if a business wants
to revalue it, it can do so & state it at the market value
as per the provisions of applicable laws.
Remember - Land is an asset with perennial value & its life
is not limited as that of other fixed assets (For which
depreciation is necessary)
Is This Answer Correct ? | 25 Yes | 3 No |
Answer / mani
Land is not depreciated because land is assumed to have an
unlimited useful life. Land is long term assets, since
land’s life is not limited, there is no need to allocate
the cost of land to any accounting periods.
Is This Answer Correct ? | 8 Yes | 1 No |
Answer / mrs. purva v. joshi
Land does not undergo wear and tear process like Plant and
Machinery or Furnitures & Fittings or Vehicles. Hence
depriciation is not calculated on Land
Is This Answer Correct ? | 3 Yes | 0 No |
Answer / chetan
land unlike other assets is a natural property and it is
always limited in supply against its demand. By virtue of
economics, the rent which is paid on the use of land is
also assumed to be ever increasing...Therefore, being a
primary factor of production and being limited in supply,
land is never depriciated.
Is This Answer Correct ? | 1 Yes | 0 No |
Answer / dhulappa
Land is not depreciated because land is assumed to have an
unlimited useful life. Land is long term assets, since
land’s life is not limited, there is no need to allocate
the cost of land to any accounting periods
Is This Answer Correct ? | 0 Yes | 0 No |
Answer / swathi
A house, car, or equipment suffer from wear and tear over time, making them worth less and less. Land does not do this. You can, of course, ruin the value of a property by tearing it up, dumping chemicals, or any number of things... But if does not "wear out". Other than fluctuations based in real-estate values rising and falling... The land generally retains it's value or increases in value (unless you spent too much on it to begin with). In fact, over the long term, land is the best investment, IMO, because unlike things which are depreciated, land will go UP in value over the long term, because the demand is always increasing, while they are not making any new land.
Is This Answer Correct ? | 0 Yes | 0 No |
Answer / santu
as the value of the land is not come down. its always keeps
on increasing. i think
Is This Answer Correct ? | 2 Yes | 3 No |
Answer / vijay kumar
In-fact value of the Land always appreciates and does not
depreciate. Building standing above the land depreciates
but not the land.
Is This Answer Correct ? | 2 Yes | 3 No |
Answer / p.kamal
we are don't know who is the land seller and who is the
land buyer?
Is This Answer Correct ? | 0 Yes | 12 No |
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