AS 6 Depreciation accounting
This query is : Resolved
14 March 2011
Illustration 1
Mr. X set up a new factory in the backward area and purchased plant for Rs. 500 lakhs for the
purpose. Purchases were entitled for the CENVAT credit of Rs. 10 lakhs and also Government
agreed to extend the 25% subsidy for backward area development. Determine the depreciable
value for the asset.
Solution
Particulars Rs.(in lakhs)
Cost of the plant 500
Less: CENVAT 10
490
Less: Subsidy 98
Depreciable Value 392
Mr. X set up a new factory in the backward area and purchased plant for Rs. 500 lakhs for the
purpose. Purchases were entitled for the CENVAT credit of Rs. 10 lakhs and also Government
agreed to extend the 25% subsidy for backward area development. Determine the depreciable
value for the asset.
Solution
Particulars Rs.(in lakhs)
Cost of the plant 500
Less: CENVAT 10
490
Less: Subsidy 98
Depreciable Value 392
15 March 2011
yaa the solution is fine
Message likes :
1 times
16 March 2011
kkk
just see
( Rs in Lacs)
Cost of the plant 500
Less: CENVAT 10 *
490
Less: Subsidy 98
Depreciable Value 392
*(As per income tax act if u take cenvat credit then that amount is not eligible for depreciation)
** subsidy is given by govt and same if u got then that much amount is also reduced from cost of plant
last thing is that depreciation is calculatd on the cost which is really incurred by the company. in ur case as 98 lacs is refunded to the company so this is not the cost to company and cenvat is like a hard cash so that also not part of cost
just see
( Rs in Lacs)
Cost of the plant 500
Less: CENVAT 10 *
490
Less: Subsidy 98
Depreciable Value 392
*(As per income tax act if u take cenvat credit then that amount is not eligible for depreciation)
** subsidy is given by govt and same if u got then that much amount is also reduced from cost of plant
last thing is that depreciation is calculatd on the cost which is really incurred by the company. in ur case as 98 lacs is refunded to the company so this is not the cost to company and cenvat is like a hard cash so that also not part of cost
Message likes :
1 times
18 March 2011
thanks neeraj. but see my query is-it is given in the question that 25% subsidy is given. but i dnt understand how the figure of 98 is derieved. because 25% of 490 is nt 98.
25 March 2011
kkk Savli
the Thing is that in the given solution calculation is wrongly done by the author
in place of 25% he took 20% and solve the problem.
Subsidy should be 122.50 in place of 98. kkkk
if u have any other query contact me
Neeraj Bansal
+917760650028
the Thing is that in the given solution calculation is wrongly done by the author
in place of 25% he took 20% and solve the problem.
Subsidy should be 122.50 in place of 98. kkkk
if u have any other query contact me
Neeraj Bansal
+917760650028
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS on Consultancy- Non DTAA
- Depreciation of fixed assets- coop housing society in mumbai
- Reopen of assessment proceeding
- Rental income gst and it purpose
- EPF FULL & FINAL RULES IN 2026
- Gift Received from nonblood relative
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- Experts need help
- Management System (IMS)
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
