Depreciation

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Guest (Querist)

04 December 2010 Why is Land not depreciated?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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04 December 2010 Land is such an asset whose value goes on increasing unlike other assets whose value gets reduce over a period of time.

All assets wear out and eventually cease to exist, except land. Land is not considered to ever be able to be destroyed, so it can’t lose value and go down to zero value like other assets.

The land generally retains or increases in value Over the long term, land will go up in value over because the demand is always increasing, while they are not “making” any new land.

Hence no depreciation on land.

BHAI(SAI) DUPARE

BHAI(SAI) DUPARE (Expert)
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04 December 2010 As we calculate depreciation as the vlaue of fixed assets
goes down due to time factor but the value of Land dont
goes dow

Guest

Guest (Querist)

04 December 2010 bhai ji why it dnt goes down?that is wat m asking

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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04 December 2010 Because, you can create all other assets but you can not create Land.

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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04 December 2010 As correctly said by SANJAY SIR.., a land's value generally increases and not reduces.. So depreciation is not provided..... And depreciation is merely a book entry, which mean accumulating an amount every year from profit to replace the asset at the end of its useful life... Now, can u tell me the what is the "useful life of land".... So if u charge depreciation, how wud u estimate the amount to b charged...

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