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

Content: Land improvement refers to enhancements made to a plot of land to make it more usable. Usually, these improvements have a useful life and, therefore, are depreciable. However, if a land improvement does not have a useful life or companies cannot estimate it, then the company cannot depreciate the improvement. Similarly, there are some costs that qualify as land improvements and some which do not. For companies to consider expenditure on land as improvement, they must meet several requirements. 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.