Handling of land use rights

Mondo Three rural Updated on 2024-01-31

The cost at which an investor invests an intangible asset.

The cost of an investor's investment in intangible assets shall be determined according to the value agreed in the investment contract or agreement, but if the value agreed in the contract or agreement is unfair, it shall be recorded at the fair value of the intangible assets.

The accounting entries are:

Borrow: Intangible assets.

Tax Payable – VAT payable (input tax).

Credit: Paid-in capital (or share capital) (share of registered capital).

Capital Reserve – Capital premium (or equity premium).

Handling of land use rights

The acquisition of land use rights by enterprises shall be classified according to the nature of the enterprise and the use of the land use rights.

Land use rights for self-use, intangible assets.

The land use right and inventory (development cost) used by real estate development enterprises for the construction of external housing buildings.

The price paid by the enterprise for the purchase of buildings includes the land use right and the value of the above-ground buildings, and if the value of the buildings and land use rights can be reasonably distributed, they shall be regarded as fixed assets and intangible assets respectivelyIf the value of buildings and land use rights cannot be reasonably distributed, all of them shall be regarded as fixed assets.

Land use rights that have been leased or land use rights that are held and ready to be transferred after appreciation, investment real estate.

When the land use right is used for self-development and construction of above-ground buildings such as factories, the book value of the relevant land use right shall not be transferred to the construction in progress, and the land use right and the above-ground buildings shall be amortized and depreciated respectively. However, during the construction of real estate such as factory buildings, the amortization amount of land use rights shall be included in the cost of construction in progress when the capitalization conditions are met.

According to the data, judge the accounting of the land use right obtained by the enterprise.

First, when the land use right is used for self-development and construction of above-ground buildings such as factories, the book value of the relevant land use right shall not be transferred to the cost of construction in progress, and the land use right and the above-ground buildings shall be amortized and depreciated respectively. However, during the construction of immovable property such as factory buildings, the amortization amount of land use rights shall be included in the construction in progress when the capitalization conditions are met, which constitutes the construction cost of immovable property.

Second, the land use right obtained by the real estate development enterprise is used to construct the largest housing buildings to the outside world, and the relevant land use rights shall be included in the cost of the buildings constructed.

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