30 May 2015
But sir doesn't guidance note issued by icai say that only if residual value exceeds 5%,disclosure is to be made?correct me if i am wrong...
02 June 2015
Para 9 of the "Application Guide on the provisions of Schedule II of the Companies Act,2013" says If > 5% disclosure is required.
But elsewhere in the said guide, ICAI says "Provided that where a company adopts a useful life different from what is specified in Part C or uses a residual value different from the limit specified above, the financial statements shall disclose such difference and provide justification in this behalf duly supported by technical advice.”
You can also see a synonymous reference in proviso to clause 3(1) of part A of schedule II of the Companies Act,2013.
02 June 2015
Sir,Then how do we present the same in Balance Sheet? Since assets which have useful life is NIL, let s say I have decided to charge it off against P&L (as Guidnace note gives us an option to either transfer it to retained earnings or charge it off against P&L)...Then how should the same be reflected in Fixed Assets Schedule Sir
03 June 2015
But sir wont this exercise lead us ti providing excess depreciation? because assume wdv of an asset whose useful life is nil is rs.5120 (whose gross block value is say 10000)accumulaed depreciation till 2014 is say 4880 and residual value is say 500...my conntention is that shouldn't (10000-500) shd be reduced from gross block and from depreciation only 4880