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Depreciation Charge on spare part

Former Member
0 Kudos


Hi All,

Please tell how to charge depreciation on below scenario.

Just Assume

I have a Machinery (Duration of the whole machinery is 10 years). successfully i have charged depreciation upto 7 years. In the 8th year, one of the spare part of that machinery got damage. I have replaced with new one (it's tenure is 10 years). Now my question is

1. Do i need to charge depreciation on that whole machinery for remaining 3 years. if so, how about new spare part.

2. What is deprecation % for new spare part.

Thanks and Regards,

Raghu

Accepted Solutions (0)

Answers (2)

Answers (2)

MarkusBredel
Employee
Employee
0 Kudos

Hi Raghu,

this answer depends on the accounting principle under which you report your assets. Unless you don´t provide the regulation under which you account, the question in my opinion cannot be answered.

Regards,

Markus

Former Member
0 Kudos

Hi,

According to me you can use the concept of sub asset in your case wherein the Spare parts will be created as a Sub-Asset of the Main Asset and the same will be depreciated over useful life of 10 years where as otriginal Machinery will be depreciated fully in the remaining 3 years of life.

Regards,

Malhar.