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yogesh sharma (CA Student)     11 December 2013


if a firm have nil business during a year can it claim depreciation during that year??

 5 Replies


Shruthi (Article Assistent)     11 December 2013

Depreciation has to be charged from the day asset is put to use in the business. No matter whether the business is nill or not, it has to be charged

yogesh sharma

yogesh sharma (CA Student)     11 December 2013

Assets are totally unused during the year.

Shruthi (Article Assistent)     11 December 2013

Depreciation is charged for the following reasons:

1.Internal Reasons like wear and tear & depletion

2.External Reasons like Obsolescence, Passage of time and accident.

In this case depreciation is charged due to passage of time

CA. Mayur

CA. Mayur (Service)     11 December 2013

Kindly refer the AS 6 Para 3.1. Relevant text reproduced below:

Depreciation is a measure of the wearing out, consumption or other

loss of value of a depreciable asset arising from use, effluxion of time or

obsolescence through technology and market changes.

Thus depreciation need to be charge even when it is not used for whole year.

CA Suresh kolluru

CA Suresh kolluru (CA,CS,M.com)     12 December 2013

Agree with CA.Mayur

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