An Assets which was useful life is over (ie full Depreciated ) but it is in operation.....
A consumable is used to the assets for operating the units ,the life of Consumable is more than one year
My Question is that whether Consumable is to be Capitalised or not ,Because Assets in which Consumable is use ,was fully depreciated and having no useful life..
Please give your suggestion by referring INDAS 16 Plant ,Property and Equipment
Once economic life is over, it isn’t disposed or an independent evaluator will assess its future economic life and can put it back to use in a factory. During that time, if the consumable is directly helping in production, it can be capitalised.if I find something else, I’ll let u know.
The residual value and the useful life of an asset shall be reviewed at least at each financial year-end and, if expectations differ from previous estimates, the change(s) shall be accounted for as a change in an accounting estimate in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors.
Therefore, depreciation does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated.
For the above depreciation principles, we can understand that every year, the useful life is assessed and sometimes the life can increase or decrease. These changes are constantly reflected in the carrying ampunts. So, what we hear or say is informal about asset life is over and still the asset is put to use. You can capitalise specific expenses and only legal or similar limits on the use of the asset, such as the expiry dates of related leases can stop the usage of existing asset.
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