Crockery is it a fixed asset ?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 December 2010
In case of Hotel, whether crockery be treated as a Fixed asset or a current asset ? What is eligible rate of depreciation on that ? Pls guide. Thanks.
04 December 2010
It can be treated as Plant as the word plant includes anything within its ordinary meaning. The general rate for plant is 15%.
However in the table of Depreciation in Appendix I. The rate of Depreciation for containers made of Glass or Plastic used as refills is 50%. Certain items may be classified in this category also.
Question may arise that Why it can not be treated as current assets?
Crockery is purchased to give an enduring benefit to the hotel till its life time. It is re-reused and its benefits last till its not destroyed or discarded. However, crockery having use & throw nature can be classified as current assets.
I welcome the opinion of Experts of our club.
However in the table of Depreciation in Appendix I. The rate of Depreciation for containers made of Glass or Plastic used as refills is 50%. Certain items may be classified in this category also.
Question may arise that Why it can not be treated as current assets?
Crockery is purchased to give an enduring benefit to the hotel till its life time. It is re-reused and its benefits last till its not destroyed or discarded. However, crockery having use & throw nature can be classified as current assets.
I welcome the opinion of Experts of our club.
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