Florida General Contractor Practice Exam

Which of the following assets cannot typically be depreciated for accounting purposes?

1. Land

2. Buildings

3. Vehicles

4. Equipment

The correct answer is: Land

Land is not subject to depreciation for accounting purposes due to its nature as a non-consumable asset that does not wear out or lose value over time like other assets. Unlike buildings, vehicles, and equipment, which all have finite useful lives that contribute to wear and tear and obsolescence, land typically retains its value or can even appreciate over time. As a result, businesses and accountants do not apply depreciation to land; instead, it remains on the balance sheet at its historical cost, unless impairment occurs. This principle is consistent across various accounting frameworks, making land a distinctive asset that differs from tangible assets that do depreciate.