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Depreciation

Hitesh Nagdev (36 Points)

27 June 2018

why do we charge depreciation still we have not used asset

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3 Replies

Ashiwini Ballodia (Managing Partner at TAXounting) (8727 Points)
Replied 27 June 2018

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

Rahul Prajapati (Student) (2282 Points)
Replied 27 June 2018

Due To :

1. Wear and tear

2. Obsolescence

3. Passage of Time

Shruti inani (Student) (117 Points)
Replied 14 July 2018

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?