asset < Rs 5000

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Student (Querist)
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25 August 2010 Expert,
If 10 DVD writers are bought for 3500 each such that vendor issues one bill for 35000 then should this be capitalised or 100% depreciated as unit cost is 3500 < 5000.

thanks
kirti.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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25 August 2010 yes. Since One writer value is less than Rs.5000, it can be depreciated 100 %

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CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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25 August 2010
Notwithstanding anything mentioned in this Schedule, depreciation on assets, whose actual cost does not exceed five thousand rupees, shall be provided at the rate of hundred per cent:]

Provided that where the aggregate actual cost of individual items of plant and machinery costing Rs. 5,000 or less constitutes more than 10 per cent of the total actual cost of plant and machinery, rates of depreciation applicable to such items shall be the rates as specified in Item II of the Schedule.

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CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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25 August 2010 if dvd writer cost constitues more than 10% of the total cost of computer, then dep rate will be as per schedule i.e 60% not 100%

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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25 August 2010 Agreed with Mr. Bansal.

Basically... this provision for 100 % depreciation for assets costing less than Rs. 5000/- is meant for assets , which can be identified, independently. & the provision is for unit value of asset.

In cases, where the assets are to be fitted in some other assets, then this overall concept of 10 % of total value, concept comes in picture.

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