When depreciation is to be charged
1. when the asset is ready to use
2. when the asset is put to use
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When to charge depreciation?
Replies (6)
when the asset is ready for its intended use then depreciation is to be charged.
Depriciation charged when put to use during the year and charged at closing date of Balance sheet.
Depriciation charged when put to use during the year and charged at closing date of Balance sheet.
Depriciation charged when put to use during the year and charged at closing date of Balance sheet.
when depreciation is to be charged
when asset is
ready to use
or
put to use
can you quote the source on the basis of which you are giving the answer like AS or guidance note etc..
Please note that an asset cannot be put to use unless it is ready to use. So the ‘Put to use’ is dependent upon the Ready to use.
Now coming to the point of charging depreciation Section 32 of the I-T Act states that depreciation is to be charged on the asset when it is put to use.
However AS6-Depreciation Accounting, depreciation can be caused due to Wear&Tear, effluxion or passage of time
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