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Land Cost to be charged to Projects

Former Member
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Dear Friends

In our company's business, during the initial stages of Project the land is acquired as an asset, and after that, based on the final reports the Project activities are Started on that Land.

The problem here is that we have no idea how to allocate the land cost which is an asset to the respective Projects.

Friends how can we allocate the land Cost(asset) into Respective Projects?

Regards

Prashant

Accepted Solutions (0)

Answers (4)

Answers (4)

Former Member
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Hi Prashant

What is your business policy. What type of projects being executed? Is the land and project treated as Asset?

Let Your finance guy decides how to book the land cost and show as asset.

Note that, while considering assets, finance guys lookinto movable and non-movable assets.

In my opinion land cost wouldt'n shown as cost to the project.

Regards,

PSR

Former Member
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Acquire a land directly as an Asset through PO with account assignment as A. Create 2 second level WBS .Assign one 2nd level WBS to that PO, so that cost on WBS is statistical and actual on Asset. Now you can use 2nd WBS in same project for the activities . The over all cost will roll up to top WBS, which will be combination of statistical cost of 1st WBS and development cost of 2nd WBS.

Hope this helps.

Sarang

Former Member
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Thanks Sarang

This was helpful.

former_member219195
Participant
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Hi prashant,

have you considered use of general cost activity and posting the land cost directly to the activity through direct activity allocation?

Former Member
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Hi

I understand from your query that your's is a Construction / Real Estate Business. I have a suggestion to your Process

Suggestion:

Project Cost = Land Cost + Development Cost

1. You define Land as Asset (with Cost Center "XYZ")

2. You create a Project for Development Project/Activities and Settle these costs to the same Cost Center "XYZ"

Thus you may get the Total cost gets booked to so called PROJECT COST

Hope this helps.

Regards

Babu