Which assets are not depreciated?

Land is not depreciated, since it has an unlimited useful life. If land has a limited useful life, as is the case with a quarry, then it is acceptable to depreciate it over its useful life. If the cost of land includes any costs incurred for site dismantlement and/or restoration, then depreciate these costs over the period over which any resulting benefits are obtained. If an entity acquires a parcel of land which includes a building, then separate the two assets and depreciate the building.

In addition, low-cost purchases with a minimal useful life are charged to expense at once, rather than being depreciated. Given their low cost, it is not cost-effective to maintain them in the accounting records as assets.

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