• Register
Search Questions / Answers

Welcome to AccountantAnswer Forum, where you can ask questions and receive answers. Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. You can register with your email or with facebook login in few seconds

Get AccountantAnswer App


Land is taken from Government on perpetual lease (Non Cancellable lease from Government side). Since there is no lease period defined or mention on lease agreement, how to depreciate/ amortize land? Leasehold land with building constructed on it is further given to unrelated party on rent for 10 years.
in IAS 40 - Investment Property by

1 Answer

0 votes
When the land has an indefinite economic life, the land element is normally classified as an operating lease unless title is expected to pass to the lessee by the end of the lease term, in accordance with paragraph 14 of IAS 17. The buildings element is classified as a finance or operating lease in accordance with paragraphs 7-13.(IAS-17)
by Level 5 Member (11.3k points)