Question

Discuss, with relevant examples, what makes a farm asset qualify to have a depreciation value.

Answer 1

To make one farm asset qualify for depreciation

1) The Asset has to be owned by a farm

2) Have a useful life more than a year

3) The asset needs to have a limited and determinable life.

4) Asset has to be used in the business

In agriculture, examples of assets which can be depreciated includes buildings, vehicles, machinery, equipment, fences and other land improvements but market livestock, real estate, crop inventories and supplies not depreciable.

If the asset using for personal purpose will be depreciable but not include in business transactions.