depreciation is calculated from the date of .....................
a)purchase of asset
b)asset put to use
Hi Priya,
Depreciation is charged on a fixed asset when it is 'put to use' that means when it starts production. After putting the asset in use it does not matter that its use is active or passive.
So, it can be said that depreciation is not charged when asset is purchased or acquired but it is charged when an asset is 'put to use'.
Note: Here,
1. Passive use of assets means when an asset is not performing any production activity due to lock-outs or strike.
2. Active use of an asset refers to the use of an asset for production that means it is in the operation.
I hope this answers your query.
Keep Posting!!
Depreciation is charged on a fixed asset when it is 'put to use' that means when it starts production. After putting the asset in use it does not matter that its use is active or passive.
So, it can be said that depreciation is not charged when asset is purchased or acquired but it is charged when an asset is 'put to use'.
Note: Here,
1. Passive use of assets means when an asset is not performing any production activity due to lock-outs or strike.
2. Active use of an asset refers to the use of an asset for production that means it is in the operation.
I hope this answers your query.
Keep Posting!!