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Hi sir,
Comp should start to amortize /dep when the assets is ready to use not when uts actually used , correct?
Here it started to amortize license from 1/7/16 when it become operational means when it actually used
Could u Clarify the issue here
Thanks v muvh
Depreciation is “the systematic allocation of the depreciable amount of an asset over its useful life.” A tangible asset’s uselife will run from when it is first put into use – not when it is ready for use.
In Zed, the licence is to operate in Farland, and it is clear from the narrative that it cannot do so until it has an operational network – which is 1.5 years after the licence was purchased. So the licence is only “used” from that point – and it has 8.5 years to run before its expiry.
In this case because License has 10 useful life. Supposed a purchased item of Tangible Asset has 10 year useful life, but put into use in the next 1.5 years, should it be depreciated over 8.5 years or 10 years?
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