Depreciatiin

dep. on building can be charged only of building taken on financing lease or capital lease but not on operating lease.

conditions to test whether a lease is financing lease or not are:- 1. The asset's title will be transferred to the lessee upon the agreement's maturation. 2. The lessee is given the option of purchasing the asset at a price below fair market value upon the agreement's maturation. 3. The term of the lease agreement is greater than 75 percent of the asset's useful life. 4. The rental payments, when discounted to present value, are equal to more than 90 percent of the asset's fair market value.