08-17-2009, 09:27 PM
"IAS-16 requires charging depreciation from the date when asset is put into use till the date asset remains under use. (Reference Paragraph 50 and 55 of IAS-16)."
As per my knowledge(may be wrong) depreciation must be charged on assets when they are available for use and not when they are put into use. Depreciation in case of temporary idle period is not allowed.i m not too sure about permanent idle assets.i think depreciation should not be charged on them.
SUpporse ABC company owns a building. it is being used by their related party without paying any charge. It is shown as asset in ABC company. But they are reluctant to charge depreciation on the logic that they are not using it. are they wrong?
As per my knowledge(may be wrong) depreciation must be charged on assets when they are available for use and not when they are put into use. Depreciation in case of temporary idle period is not allowed.i m not too sure about permanent idle assets.i think depreciation should not be charged on them.
SUpporse ABC company owns a building. it is being used by their related party without paying any charge. It is shown as asset in ABC company. But they are reluctant to charge depreciation on the logic that they are not using it. are they wrong?
