Land

Land

A non-depreciable tangible asset recorded at historical cost, representing the ground on which business facilities are located or held for investment purposes.

For example, a company might purchase land for $500,000 to build a factory, recording this amount separately from the building because land typically has an unlimited useful life and is not subject to depreciation.

Land costs include purchase price, closing costs, site preparation, and environmental remediation expenses. Unlike buildings and equipment, land is not depreciated because it generally maintains its value and has an unlimited useful life. Separating land from building costs is essential for proper depreciation accounting.