land

Definition 1

General: Primary input and factor of production which is not consumed but without which no production is possible. It is the resource that has no cost of production and, although its usage can be switched from a less to more profitable one, its supply cannot be increased. The term 'land' includes all physical elements in the wealth of a nation bestowed by nature; such as climate, environment, fields, forests, minerals, mountains, lakes, streams, seas, and animals. As an asset, it includes anything (1) on the ground (such as buildings, crops, fences, trees, water), (2) above the ground (air and space rights), and (3) under the ground (mineral rights), down to the center of the Earth. Perhaps the oldest form of collateral, land is still very attractive to lenders because it cannot be destroyed, moved, stolen, or wasted. All a lender needs is the borrower's clear title to it.

Definition 2

Accounting: Land owned for productive use is referred to as a fixed asset account (not subject to depreciation due to its un-wasting nature) and is listed under the equipment, land, and plant subheading in a balance sheet. It is recorded at its purchase price plus legal and development costs (such as for surveying, draining, excavation, filling, and grading). Land held for investment is listed under investments; a real estate firm, however, may list it under inventory. See also land development and land improvement.