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What are the circumstances that i could stop charging depreciation exp.
Please guide me to a situation that my company is in agriculture crop growing business and it has a long range of various assets which can be classified in 2 groups:
1st asset group (General in Nature and not specifically related to production of crops) these are:
Furniture and Fixtures
The 2nd group (Specifically related to purpose of growing crops), these are:
Fiber urea tanks
Diesel engines etc.
Since Jan 2019, our company has stopped producing crops due to change in governmental policy. We are not allowed to produce certain kind of crops which were allowed earlier.
Currently, our holding company is not focused on carrying on any further economic activity in Agriculture Co. However, the other group companies are working reasonably well. In this scenario, the depreciation charge is a big chunk of expense coming in Income Statement on monthly basis. My Senior Accounting Manager is asking me to look for options that we can stop charging depreciation.
As part of studies and experience, under IFRS and accounting policies, i do not find any legitimate options to stop depreciation charge. Either we should sale the assets, or make an impairment testing, or classify them as non operational (being retired) and charge the remaining book value in income statement.
In this scenario, i would look for your guidance that, is there any possibility to stop depreciation charge on the scenario i mentioned above?
Looking forward for your precious response on the above.