IF YOU WROTE THE RULES FOR GAAP WOULD YOU REQUIRED FULLY DEPRECIATED ASSETS TO BE TAKEN OFF THE BOOKS? WHY OR?

{ 1 comment… read it below or add one }

Jennifer B April 16, 2010 at 3:01 pm

Yes. Because unless they were artificially depreciated for accounting purposes, a fully depreciated asset has no salvage/monetary value and is, therefore, no longer an asset. Presenting them as such creates a false impression of a firm’s wealth.

Even if the depreciation of the asset was artificially accelerated, I don’t think it would be acceptable to allow the firm to benefit from accelerating that depreciation (for tax reduction purposes, generally) AND allow the depreciated “asset” to remain an asset (for wealth inflation purposes).

Leave a Comment

Previous post:

Next post:

http://www.maxprofitsinvest.com