depriciation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2010 sir/mam

how can hire purchaser claim depriciation; and hire vendor being legal owner having title of the asset canot do so..?please clarify this concept.

Jitender

Jitender (Expert)
Follow

07 August 2010 hire purchaser will claim the dep on the basis of cash price of the asset and hire vendor is not entiitled for dep

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2010

Upgrade to CAclubindia Pro. Subscribe Now!

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
Follow

08 August 2010 When a buyer undertakes to make payment of the price of the asset by installment, it is hire purchase. In case of hire purchase the intention of the buyer is to purchase the asset and he only pays the price by installment. The possession of the asset remains with the buyer and ownership is transferred only when the whole of the price is paid for it. Even the benefit of depreciation and other deductions are available to the Buyer. The asset held under hire-purchase is shown in the balance sheet of the Buyer. In case of hire purchase, the buyer gets the benefit of depreciation on the cash price of the asset, because he is treated as the owner.