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HI
If an entity uses machine hour method in depreciation policy, and plan that the non current asset will be used the next 2 years and expect that how many hours they will work. (1st year 200 days, the second year 180 days) but after one year the entity decides to stop to use that non current asset in the production temporarily (for example 1 year). in this case if it asset is not used in production, entity will stop to charge depreciation for it or will change depreciation method from machine hour to another one?It will simply suspend depreciating the asset until it’s put back into action
Ok?
ok. However, if the entity does not want to suspend, wants to change depreciation method.(for example, Straight-line Depreciation.) is it true? can the entity do it and continue to charge depreciation?
I suppose that it can, but why would it?
And technically it would be incorrect – you should match the depreciation expense against the revenues that the asset has helped to generate
Ok?
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