USA Real Estate Developer - Classifying Asset Under Development


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I have a client that is real estate developer in which they purchase parcels of land to develop for 3rd party customers.

The developer creates a wholly owned subsidiary to hold the purchased land under while it is developed and building is built on the land.

I'm curious as to how to classify the capitalized costs of these on the wholly owned sub for land and legal costs associated with the purchase. The wholly owned sub in which the title of the land is held typically sells the land to a newly created JV with 3rd party in which the actual construction costs begin to be capitalized.

Should the land and legal costs be classified as land on the wholly owned sub, or another category such as asset under development, even though it will not be technically "developed" under that entity?
 
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