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depriciation

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Querist : Anonymous

Querist : Anonymous (Querist)

08 August 2010 sir,
i wanted to know hire purchaser is not the owner claiming depreciation .. which provision is applicable or this is as per which rule

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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08 August 2010 When a buyer undertakes to make payment of the price of the asset by installment, it is hire purchase. In case of hire purchase the intention of the buyer is to purchase the asset and he only pays the price by installment. The possession of the asset remains with the buyer and ownership is transferred only when the whole of the price is paid for it. Even the benefit of depreciation and other deductions are available to the Buyer. The asset held under hire-purchase is shown in the balance sheet of the Buyer. In case of hire purchase, the buyer gets the benefit of depreciation on the cash price of the asset, because he is treated as the owner.

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