Question

What are some reasons you may NOT be able to depreciate a particular purchase. Also, are there are any specific classifications of assets that you would never be able to depreciate?

Answer 1

Depreciation is genelly associated with assets so purchases which do not result in assets go out of the scope of depreciation.

Depreciation is charged in proportion to the useful life of the asset.

Specific Classifications include:-

1. Land because it had unlimited useful life (unless land for particular cultivation or extraction which has useful life)

2. Other assets like tools and spares which have short or up to 1 year of useful life are directly charged as expense hence not treated as depreciation .

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