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Class 12 Tuition > Learn Class XI-XII Tuition (PUC) > Why there is higher depreciation rate on computers...
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Why there is higher depreciation rate on computers and less on buildings?

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Trainer of SAS, SPSS, R & MS-Excel.

Semiconductors loose their property and start functioning poorly with time. While it takes a very long time for bricks and cement and concrete to start function improperly.
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Subject Accountancy teacher

Rate of depreciation is higher on computers in comparison to buildings due to the following reasons: - i. Computers are electronic goods hence possibility of becoming obsolete is much higher than that of buildings. ii. Hours of use also determines the rate of depreciation. A computer...
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Rate of depreciation is higher on computers in comparison to buildings due to the following reasons: - i. Computers are electronic goods hence possibility of becoming obsolete [loss of usefulness through technological changes] is much higher than that of buildings. ii. Hours of use also determines the rate of depreciation. A computer is used on an average period of 8 to 10 hrs daily hence resulting in higher rate of wear and tear. To account for such higher rate of usage, high rate of depreciation is charged. read less
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Friend Philosopher and E Guide for MCA, class IX-X, Polytechnic Diploma, BCA, BSc, BTech

Because the electronics goods don't last long every moment new things are discovered in electronics which makes the old product backdated. While the older the building better the foundation. No new such discover in civil.
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Btech and PUC tutor

Because of ease of design and manufucaturing considerations, source of raw material demand.
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Expert in SAP Successfactors, SAP HCM and the basics of Knowledge

Because technology is moving fast , so when you buy a phone or a computer with in the next 2-3 months they come up with new stuff but with buildings I think it increases then decreases.
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M.com.

Computers get outdated and obselete. As there are new versions day by day. However building is an asset which always wil carry a better and higher value due to its independence.
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Trainer

Computer is a machine its life decreases as time increases, There is no component of computer whose value increases. But in case of Building the strength of building also decreases as time increases but very slowly comparing computer, secondly the value of land of the building increases as time increases...
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Computer is a machine its life decreases as time increases, There is no component of computer whose value increases. But in case of Building the strength of building also decreases as time increases but very slowly comparing computer, secondly the value of land of the building increases as time increases so the rate of depreciation on computers is more than buildings. read less
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Certified Excel Expert with 6 years of Professional Experience in BFSI

Building have long life than computer .
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Two word answer "Moore's law" the number of transistors in an electronic device has doubled every year for nearly 4 decades. So computers almost double their calculation speeds every year a new computer you buy today becomes redundant and slow after only a few years so no one would rebuy it from you......
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Two word answer "Moore's law" the number of transistors in an electronic device has doubled every year for nearly 4 decades. So computers almost double their calculation speeds every year a new computer you buy today becomes redundant and slow after only a few years so no one would rebuy it from you... No demand for your good hence huge depreciation. While comparing it with buildings is not a good idea because they are completely different set of economic entities with different factors and variables governing them even they depreciate value some times faster than electronic goods (read about ghost cities in china). Everything boils down to demand and supply once human population saturates or supply of buildings become enormous they will depreciate value very quickly... Comparison of computers with something like Gold would have been much easier to understand. The technology for making different types of gold jewels and ornaments has been mastered long ago in the history and cost of production cannot be made any cheaper ... it can go higher. So gold appreciates considerably despite being a similar asset to computers because technology to make fastest computers is still in the market... once we reach that saturation point computers will appreciate their value as well. read less
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Law Classes to class XI and XII and GST and Income Tax Classes to others

Depreciation rates depends on assets life and assets value . Computers useful life and its value is shorter than building.
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