Which of the following is not subject to depreciation?

B

Land has unlimited useful life and is not consumed when it is used, and therefore not subject to depreciation.

Depreciation is the allocation of the cost of an asset over its useful life. It represents the decrease in the value of the asset due to factors such as wear and tear, obsolescence, or the passage of time. Depreciation is typically applicable to tangible assets, which are physical assets that can be touched or seen.

Let's analyze each option to determine which one is not subject to depreciation:

A. Automobiles: Automobiles are tangible assets that are subject to depreciation. They are expected to lose value over time due to factors such as wear and tear, technological advancements, and market demand. Therefore, automobiles are subject to depreciation.

B. Land: Land is a tangible asset, but it is not subject to depreciation. Land is considered to have an indefinite useful life because it does not typically wear out, become obsolete, or lose value over time. Its value may appreciate, but it is not subject to the concept of depreciation. Therefore, land is not subject to depreciation.

C. Machinery: Machinery is a tangible asset used in business operations and is subject to depreciation. Similar to automobiles, machinery is expected to wear out, become outdated, or lose value over time due to technological advancements. As a result, machinery is subject to depreciation.

D. Land improvements: Land improvements are tangible assets that enhance the value or utility of land. Examples of land improvements include driveways, fences, irrigation systems, or parking lots. Unlike land itself, land improvements are subject to depreciation. Over time, these improvements can deteriorate or become outdated, necessitating the recognition of depreciation expense.

Therefore, the correct answer to the question is B. Land, as it is not subject to depreciation.