PROPERTY DEVELOPMENT ACTIVITIES MASB 32/MFRS 201-Part2

PROPERTY DEVELOPMENT COST

Criteria

l  Classified as current assets

l  Comprise all cost that are directly attributable to development activities

l  A portion of the cost, based on the stage of completion, transferred and recognised as an expense in the income statement when unit are sold

Component cost:-

i.                              Costs associated with the acquisition of land

ii.                             Costs directly attributable to the specific               development activity

iii.            Costs attributable to the development activities              in            general and can be allocated      to the project/common             cost. Allocated based on             relative sales value of the            projects that benefit from such cost.

Costs associated with the acquisition of land

•       Purchase price,

•       Stamp duties,

•       Legal fees

•       Conversion cost

•       etc.

Costs directly attributable to the specific development activity

•       Professional fees,

•       Contractor cost,

    (e.g earthworks, building construction)

•       Site labour cost

•       Financing cost

    (e.g loan interest, legal fee on loan facilities)

•       etc.

General cost/Common cost

•       Connecting roads

•       Infrastructure

•       etc

Allocation of cost

•       Specific identification eg building costs to residential properties

•       Relative sales value where specific identification not possible

•       Other appropriate methods consistently applied where allocation based on relative sales value is impracticable