Depreciation
yogesh sharma (CA Student) (268 Points)
11 December 2013
if a firm have nil business during a year can it claim depreciation during that year??
yogesh sharma (CA Student) (268 Points)
11 December 2013
Shruthi
(Article Assistent)
(336 Points)
Replied 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
(CA Student)
(268 Points)
Replied 11 December 2013
Shruthi
(Article Assistent)
(336 Points)
Replied 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
(Service)
(147 Points)
Replied 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.
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