my query is regarding depreciation on assets in case of the closer of business in which some assets were sold and some assets were retained by the owner(proprietor) .. i want to know whether depreciation should be provided in the books of account on the assets retained by the owner and further the said business is closed down due to heavy loss and there is no contingency/hope that business will start in future ... what should i do ..whether depreciation should be provided in the books of account ... in this case no depreciation is provided in books ... further as per incometax law whether depreciation as per law will be available or not ...whether AS 22 shall be applicable or not ? on which amount DTA shall be provided in this case of closer of business ..? thanks in advance
19 May 2014
once you transfer assets from the books of business to the proprietor, depreciation need not be provided. alternatively, even if you continue showing the same as business assets, the unabsorbed depreciation will only keep piling up as it cannot be set off against salary income.
20 May 2014
sir is there any Legal provision that if the assets is transferred from proprietorship business to the proprietor ..on which as u said that depreciation should not be charged
20 May 2014
it is an accounting entry...not that you have to legally transfer assets. if the asset is not being used for business, depreciation should anyways not be provided. further given that you are not continuing any business, even if you provide for depreciation, you wont be able to set-off the loss against salary.
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