Vision classes
- Books Name
- Vision classes Accountancy Book
- Publication
- Vision classes
- Course
- CBSE Class 11
- Subject
- Accountancy
Effect of any addition or extension of asset
The amount incurred on such additions/extensions is capitalised and written off as depreciation over the life of the asset. It is important to mention here that the amount so incurred is in addition to usual repair and maintenance expenses.
The effect of any addition or extension of asset are-
- Any addition or extension, which becomes an integral part of the existing asset should be depreciated over the useful life of that asset.
- The depreciation on such addition or extension may also be provided at the rate applied to the existing asset.
- Where an addition or extension retains a separate identity and is capable of being used after the existing asset is disposed off, depreciation, should be provided independently on the basis of its own useful life.
