Depreciation should not be recorded for a depreciable asset that is increasing in value.

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Depreciation is the systematic allocation of the cost of a depreciable asset over its useful life, taking into account factors such as wear and tear, obsolescence, and the passage of time. If a depreciable asset is increasing in value, it means that its market value is rising faster than its recorded cost, and therefore depreciation is not appropriate. However, it is important to note that such situations are rare and usually only occur in assets that are held for investment, such as real estate, and not for use in operations.

Depreciation Should Not Be Recorded for a Depreciable Asset That