Asset category: Land
Freehold land. It is never depreciated, so the category has no depreciation rows.
In detail
Land is the one asset category that never depreciates, because land does not wear out or expire. In the demo chart it posts to Land - YFF under Property, Plant and Equipment, and the category has no depreciation rows, so an Asset created under it builds no Asset Depreciation Schedule and posts nothing after the purchase. Its value changes only through an Asset Value Adjustment after a revaluation or impairment, or on sale. When land is sold, the difference between the sale price and the book value goes to Gain on Disposal of Assets or Write Off, and the buyer withholds advance tax on the gain at 7.5% or 10% depending on the holding period.
Formula
Net book value of land = Cost + capitalised registration costs; depreciation = Rs 0
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Land - YFF | Rs 50,00,000 | |
| Bank Account - YFF | Rs 50,00,000 |
How to record it in BRAccount
- 01Go to Assets > Asset Category and open Land; confirm it has no depreciation rows.
- 02Go to Buying > Purchase Invoice > New with the land item marked Is Fixed Asset and the price.
- 03Submit. The cost debits Land - YFF and a draft Asset appears.
- 04Open the Asset, tick Calculate Depreciation off if shown, and submit.
- 05Revalue later with Assets > Asset Value Adjustment; otherwise the value stays at cost.
When to use it
Pick it on land purchases; only revaluation or disposal changes its value.
Example from the demo books
A Rs 50,00,000 plot in Bhaktapur held at cost.