capitalisation of assets

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sam trikha (Querist)
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06 February 2011 10 fan @ 3000 each purchased=30,000
company act= capitalise if more than 5000
query
1.value of 5000 taken per fan or total purcahse invoice basis ?

2.procedure of 100% depreciation taken?? either in fix asset and depreciation shown in dep chart
or
to be taken as eletricity exp ??

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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06 February 2011 Proviso to note 8 of schedule XIV of the Companies Act,1956 is reproduced below.

[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.]

From a reading of the above the conditions to be satisfied are:-
1) Items purchased should be plant and machinery.
2) If consists of more than one unit, Rs. 5,000/-is for the aggregate cost of all units purchased.
In view of the above, my understanding, is 100% depreciation cannot be availed in the cited issue.

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