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Depreciation

Jay Prakash Mishra (Article Assistant) (84 Points)

01 May 2012

In 15% block there is a car with Opening Balance of Rs.430451/- and the same was sold in Rs350000/- and a new car is purchase on 18-12-2011 worth Rs.884209/- how to compute depreciation in this case ?

Point to be explianed- 1) Can depreciation can be claimed for Old Car and if not why?

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9 Replies

Kashvi (CS) (231 Points)
Replied 01 May 2012

Depreciation here should be claimed on block basis here and the total value of the block can be aggregated to arrive at the final depreciable value..

1 Like

sumit (CA final Student) (151 Points)
Replied 01 May 2012

add the value of first car, subtract the value of sale and add the car purchased again, and then charge the depreciation , this is called as block calculation.

2 Like

Roshan A (Chartered Accountant) (458 Points)
Replied 01 May 2012

Originally posted by : Jay Prakash Mishra
	In 15% block there is a car with Opening Balance of Rs.430451/- and the same was sold in Rs350000/- and a new car is purchase on 18-12-2011 worth Rs.884209/- how to compute depreciation in this case ? Point to be explianed- 1) Can depreciation can be claimed for Old Car and if not why?

Closing balance=[(430451-350000)+884209]=964660.

Of the above:

Depreciation @ 7.5%(since used for less than 180 days)=884209*7.5%=66315

Depreciation @ 15%=(964660-884209)*15%=12067

Total Depreciation=78382

Closing WDV=964660-78382=886278

Regards,

2 Like

Biswajit Das (Account Executive) (38 Points)
Replied 02 May 2012

Dear

Jay Prakash Mishra,

Kindly find the file attached which will give you an idea of depreciation calculation

Regards,

BisHwaJeet

Attached File : 435129 974033 depreciation calculation.xlsx downloaded: 179 times

2 Like

Jay Prakash Mishra (Article Assistant) (84 Points)
Replied 02 May 2012

Thank u very much

Prasad (Sr. Manager) (617 Points)
Replied 03 May 2012

Could some one explain why in this case it should be block Depreciation. the old car can be written off and the differnce can be transfered to P&L, loss or gain on sale of FA. and new car be brought in FA register.