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Query on derpreciation

sowmiya.v (ca student) (156 Points)

17 January 2013

Hi Friends,

Can land be depreciated as per Accounting Standard - 6 ? If yes please explain.

Thanks in advance

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5 Replies

Ashwani Narnoli (.) (1843 Points)
Replied 17 January 2013

Depreciable assets are those assets which are expected to be used for more than one accounting year, have limited life and held for use in prodn or rendering of services. Since land has unlimited life it is not depreciated

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shikhar (LEARNER ) (1394 Points)
Replied 17 January 2013

FRIEND, AS PER AS6 DEPRECIABLE ASSETS ARE THOSE ASSETS WHICH..........

(1) HAVE A LIMITED USEFUL LIFE

(2) ARE EXPECTED TO BE USED FOR MORE THAN ONE ACOUNTING PERIOD .

(3) ARE HELD FOR USE IN PRODUCTION OF GOODS AND SERVICES (not for the purpose of sale in ordinary course of busines )

THE MOST IMPORTANT POINT OF AS6 IS IT IS APPLICABLE ON DEPRECIABLE ASSETS AND LAND IS NOT DEPRECIABLE ASSETS..

Manikanth (Chartered Accountant) (342 Points)
Replied 18 January 2013

Land is not a depreciable assest, since it has an unlimited life.So as per AS-6, land wasn't considered as a depreciable assest

CA DIGANT CHADHA (Academician & Consultant) (195 Points)
Replied 22 January 2013

land is not depreciable thanks

Amit Dharnia (Trainer on Global education) (98 Points)
Replied 23 January 2013

Land may be depreciated if used under Finance lease for a specific period of time. It becomes subject to depreciation again even as a fixed asset if the usage period is limited.

IAS 16 and IAS 17 support this.

Thanks

Amit

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