08-18-2009, 02:00 AM
Depreciation does not cease even when the asset becomes idle or is retired from active use unless the asset is fully depreciated.
Whether depreciation is to be charged or not also depends upon the method of charging depreciation.
When the depreciation is charged on production basis i.e on the basis of number of units produced in an year, then definitly there is no need to charge depreciation if the machinery remained idle.
Other wise depreciation shall not be charged if the asset is classified as held for sale.
I quoted para 55 if IAS 16
Regards
Waqas Shabbir
