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determine the amount of depreciation

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Querist : Anonymous

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Querist : Anonymous (Querist)
15 December 2009 Mr.X Purchased a Shop in the Multi- Stored Marketing Complex for Rs.10 lakhs, after that he constructed a Show Room in that shop and started a Proprietorship Business. The construction cost of the show room is Rs. 12 lakhs. Please determine the amount of depreciation (rate of depreciation :10%).
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Heera Nahariya

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Heera Nahariya (Expert)
15 December 2009 (10+12)*10%
=2.2
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Querist : Anonymous

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Querist : Anonymous (Querist)
15 December 2009 Sir, but i think,the cost of Shop Rs.10 lack should not consider for depreciation.Because day by day the value of shop is increasing, how can it's value depreciate ? Only cost of construction of Show Room consider for depreciation i.e. 10% of 12 lakhs = 1.2 lakhs. (i am not sure but it is my view).
Thanks.
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CMA Arif Farooqui

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CMA Arif Farooqui (Expert)
17 December 2009 not value of shop but value of land will increase that is why no dep is charged on land. depreciate amount would be 2.2 lakhs
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