Which assets does not require provision for depreciation?
a) land b) leases assets c) live stock d) loose tools
Dear Student,
Provision for depreciation is not required on assets which do not depreciate at all. And such an asset is Land.
Land is considered to be a limited resource with an infinite useful life. Unlike other assets, land never wears out or gets destroyed. It can be used for a range of purposes. And thereby, in reality over a period of time land instead of depreciating, appreciates due to its increasing demand. Thus, option (a) is correct.
Keep posting!!
Provision for depreciation is not required on assets which do not depreciate at all. And such an asset is Land.
Land is considered to be a limited resource with an infinite useful life. Unlike other assets, land never wears out or gets destroyed. It can be used for a range of purposes. And thereby, in reality over a period of time land instead of depreciating, appreciates due to its increasing demand. Thus, option (a) is correct.
Keep posting!!