why do we charge depreciation still we have not used asset
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Depreciation
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Depreciation is normal wear & tear of asset.
Even if you don't use the asset the efficiency/life of the asset reduces so we charge depreciation even if asset is not used
Even if you don't use the asset the efficiency/life of the asset reduces so we charge depreciation even if asset is not used
Due To :
1. Wear and tear
2. Obsolescence
3. Passage of Time
but according to the new AS of depreciation. It states that depreciation js charged after the machinery is put to use till the time it's useful life is not completed. Because any expenses in the machine before it is used will be added in the cost so it can be possible that later on more amounts will be charged on mahinery so how can we put depreciation before it is put to use?
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