My query is regarding depreciation.as currently we are following W.D.V method for depreciation and want to change to SLM method wef 01-04-2014.under new companies act the useful life of assets have been reduced from 20 yrs to 15 yrs hence,SLM rate comes to 6.33%((100-5)/15)).the SLM rates under the previous companies act was 4.75%. since SLM method of depreciation is to be applied from beginning as it is change in policy so,depreciation upto 31-03-14 is to be recalculated with SLM method.now my question is whether we can apply rate of 6.33% for calculating depreciation for prior period upto 31-03-14.
26 December 2014
No prior period calculation is required. Carrying cost as on 01-04-2014 has to be depreciated over the remaining useful life of the asset.
26 December 2014
You can't opt for it you have to follow companies act 2013. The time of transition to new method of depreciation as per Schedule-II of Companies Act,2013, the requirement of Accounting Standard -6 “Depreciation Accounting” has been violated. Earlier as per Companies Act, 1956, depreciation on fixed asset has been calculated as per the percentage provided in schedule-XIV of Companies Act,1956 and As far as Accounting of depreciation is concerned provision contained in Accounting Standards-6: “Depreciation Accounting” is required to be followed. But Companies Act,2013 vide its Schedule –II prescribe for both calculation of depreciation based on Useful life of individual Asset as well as accounting of depreciation. Hence, In our view the requirement of Schedule-II of companies Act,2013 is always prevail over the treatment prescribed in Accounting Standard-6. -