Depreciation is charged on fixed assets only because it is necessary to apportion the cost over a number of years during the useful life of an asset and there is no question of useful life for current assets.

What is depreciation are all fixed assets subject to depreciation?

Depreciation is the systematic reduction of the recorded cost of a fixed asset. Examples of fixed assets that can be depreciated are buildings, furniture, and office equipment. The only exception is land, which is not depreciated (since land is not depleted over time, with the exception of natural resources).

Which of the following fixed assets is not depreciated?

Land is not depreciated because land is assumed to have an unlimited useful life. Other long-lived assets such as land improvements, buildings, furnishings, equipment, etc. have limited useful lives. Therefore, the costs of those assets must be allocated to those limited accounting periods.

Which of the following would not be depreciated?

Land, although a fixed asset is never depreciable. It has an unlimited useful life and therefore can not be depreciated. Depreciation is allocation of cost of fixed asset over its useful life. Value of land can not be reduced to zero and it can not be allocated over its useful life.

Which assets Cannot be depreciated?

Land is not depreciated, since it has an unlimited useful life. If land has a limited useful life, as is the case with a quarry, then it is acceptable to depreciate it over its useful life.

What is the percentage of depreciation on fixed assets?

Depreciation rates as per I.T Act for most commonly used assets

What is not depreciation?

You cannot depreciate property for personal use and assets held for investment. Examples of non-depreciable assets are: Land. Current assets such as cash in hand, receivables. Investments such as stocks and bonds.

Which obsolescence is considered for the estimation of depreciation?

Only expected obsolescence is considered for the estimation of depreciation and not unexpected obsolescence. This is because expected obsolescence occurs when there is change in technology, change in demand etc. And as per the definition of depreciation, this has to be considered for the estimation of depreciation.