Depreciation of Land
It is a norm for students to be taught that Land does not depreciate in the accounting field. However, there are cases where land could be depreciated. If you remember, or perhaps, you are not aware, there are four factors of production, namely: • Land • Labour • Capital • Entrepreneur Land as we know, is a free gift of nature (although you still have to pay for it). It is subject to diminishing returns, that means, land depreciates. It could depreciate by means of flood, erosion, or any other means. Land may not also be 'just the ground', but also resources obtainable from them. Despite the fact that Land depreciates, it is 'in most cases', not taken into account. I may not be right, but I believe it is because the value of depreciation cannot be ascertained and also because not all Lands may come in contact with adverse conditions that make them depreciate, or depreciation of land rarely occurs. For the fact that it is 'subject to', does not mean it de