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      Question

      Which of the following assets is a non-depreciable

      asset?
      A Buildings Correct Answer Incorrect Answer
      B Furniture and fixtures Correct Answer Incorrect Answer
      C Patents Correct Answer Incorrect Answer
      D Land Correct Answer Incorrect Answer
      E Vehicles Correct Answer Incorrect Answer

      Solution

      Non-depreciable assets are those assets that do not lose their value over time and are not subject to depreciation expense.  Land is a non-depreciable asset because it does not have a determinable useful life. The cost of land is not subject to depreciation, although improvements made to the land may be depreciable. One may have confusion regarding patent, to clarify patents are generally amortized over their useful life, which is the period over which the patent is expected to provide economic benefits. The amortization expense is recognized as an operating expense on the company’s income statement and is used to allocate the cost of the patent over its useful life.

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