Is land subject to Depreciation?

Land is not subject to depreciation. This is because land has an indefinite useful life; it does not wear out, become obsolete, or get depleted in the same way that tangible assets, like buildings or machinery, do. While buildings and other improvements on the land may depreciate due to wear and tear or obsolescence, the land itself remains unchanged in value over time.

This concept is fundamental in accounting and asset management, as it distinguishes land from other types of fixed assets that have a limited usable life and require systematic allocation of their cost over that life span. Consequently, the cost of land is not expensed over time through depreciation on financial statements, contrasting with the treatment of depreciable assets.