18 April 2014
Dear Sir/ Madam, We purchased machinery for Rs.450lakh in July 2011 and charge depreciation on SLM basis @ 4.75%. In Dec 2013 we received subsidy from government for Rs.88 lakhs. what should be the treatment of subsidy received and depreciation calculation after subsidy received for the period ended 31.03.2014????
21 April 2014
Thanks for reply. Subsidy direct related to Machinery. But after the subsidy received what will be the depreciation effect if we use SLM method. From purchase year we charged machinery on gross book value. In those year we charged depreciation including subsidy amount. What will the effect of the depreciation already charged on subsidy amount.If WDV method followed than it is clear that just deduct subsidy amount from WDV and prospectively charged depreciation. What will be effect if SLM followed.