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Hi,
I was wondering about IAS 16 regarding land which has not yet been developed. This would be recognised as a tangible asset, so why do we not depreciate this and have an unlimited useful life?
How do we record this in the FS?
DR Expense in SOPL
DR NCA in SOFP
?? I’m a bit confused?Thank you.
If you buy land: Dr IP / PPE Cr Cash (IP if held for investment potential)
No development = no double entry
No depreciation
Possible impairment if land values fall significantly : DR P&L CR PPE
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