If an asset's bases of depreciation is the amount of units it produces during the year, and the asset was not used does it still get depreciated?

Hi Kelsie, Depriciation is a systematic allocation of purchase price or cost, in simple terms ie from an accounting point of view, coming from the assumption that value or economic benefits of carrying an asset for a certain period will be systematically comsumed as time moves. Therefore units of production should be one of the bases of calculating Fair Value, at some point in time to adjust the Carrying Amount or Book Value, not depreciation ie to include impairment testing. In conclusion, assets lose value by many ways other than just being in use- technological advancement, economic obsolescence etc

This method is appropriate when depreciation is directly related to the machine's wear and tear on account of units produced.  When no units are produced it is not appropriate to charge depreciation.  However,  future earning potential and obsolescence due to technology advancements are to be considered before taking a decision to not to charge depreciation.