Title: Land improvements depreciation | WIKIACCOUNTING
Headings: Land improvements depreciation
Land improvements depreciation
What is the land improvement?
Accounting treatment
Depreciation
Conclusion

Content: Most importantly, the expenditure should be of capital nature and not revenue nature. It means that any expense borne on land should enhance its quality, increases its useful life or increasing its value. Any regular maintenance work done to it does not qualify as capital expenditure. That is the reason why expenditure such as demolishing an existing building and clearing and levelling the land do not qualify as capital expenditure. Companies perform these actions as a part of regular maintenance and do not affect the value of the land. Demolishing a building also has an impact on the value of the building and not the land. Other improvements to land, for example, adding elements to it can qualify as improvements. For instance, if a company installs drainage and irrigation systems, landscaping, parking lots, driveways, walkways, outdoor lighting, or fencing, it can recognize it as a land improvement. Almost all these items have limited lives and, therefore, the company must depreciate them. Accounting treatment
The accounting treatment of land improvements comes under the accounting standard for property, plant and equipment.