I have a question regarding calculating property plant and e

I have a question regarding calculating property, plant, and equipment. Can someone please help me differentiate why land is included in the property, plant, and equipment balance sheet while land leased is not?

Solution

Owned land obviously comes under the head property plant and equipment. Assets held under a finance lease also fall under property plant and equipments, as they satisfy the definition of PPE as per IAS 16, i.e. right to use the asset for a period of more than one year.

However, talking about leased land, leased land typically will never be a finance lease as land is considered to have infinite useful life. Therefore, leased land will always be an operating lease and an operating lease does not result in any asset appearing on the balance sheet. Therefore, there is no case fo leased land coming in the balance sheet at all, leave aside the classification. Hope this answers your question. Please comment if you need more info