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Hello,
What is a class of asset? Is property, plant and equipment each a different class of asset or is the whole property, plant and equipment one single class?I have a doubt regarding the depreciation of assets under the same class.
Are all assets under the same class depreciated the same way or each item of asset under the same class is depreciated differently?
For example under property class, should property 1 and property 2 be depreciated using the same rates?Thank you
Hi,
A class of asset would refer to the different type of asset within an asset category. So within property, plant and equipment we would have land and buildings or motor vehicles as different classes of asset.
Each asset within a class of asset would usually be depreciated in a similar manner, straight line/reducing balance, but there is no requirement for each item within the class to be depreciated in exactly the same way. You could therefore depreciate your property 1 and property 2 at different rates, it would all depend on your estimate of their economic lives.
Hope this helps
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