AS-6-depreciation

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gurdeep singh (Querist)
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19 October 2009 suppose a machinery is purchased on 1-01-01
installed on 1-02-01 inuagrated on 1-03-01 test trial done on 1-04-01 and production through it started on 1-05-01.

My question is - from which date would we consider the depreciation charge?.
from which date chould we charge depreiation on it?

CA CS CMA Srinivasan N

CA CS CMA Srinivasan N (Expert)
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19 October 2009 Hi,
With respect to the date of capitalisation there are few principles when you read AS6,AS10 and also the principles on IFRS IAS 16
a) When a new project is capitalized, the criteria for capitalization date is the date of Commercial production. Thus when there are many mahcineries/assets constructed or purchased and thereafter a trial run is done, the capitalization date will be the date of final approved commercial production complying with all the output quality norms.
b) For additions made to existing plant for replacements or extension will be based on the date of putting into use. So the date will be the start date of using the machine.

You can accordingly apply the principles in your case.

Rgds
Srinivasan

Sreedhar Atchutuni ACA,GradCWA

Sreedhar Atchutuni ACA,GradCWA (Expert)
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19 October 2009 Depreciation has to be charged when commercial production has been commenced.

So in your case depreciation has to be charged from 1-5-2001.

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