Shall we add the interest amount in principal amount to calculate depreciation of fixed assetes?

Question

we have purchased a new car at loan or lease. we want ot fix depreciation on it. Than we will add total interest value in principal value to calculate the straigh line depreciation or only on principal value?

Answer 1

you can only do that for capitalized interest (things like carrying costs while you're building a skyscraper).

otherwise, the interest is just expensed - this (should) actually result in more tax savings, anyway, due to the time value of money.