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Change in depreciation rates

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Querist : Anonymous

Querist : Anonymous (Querist)

11 December 2015 Dear Friends,

The company is registered under the companies act, 1956. The company is in the business of power generation. Now the company is going to start its commercial operation from February month. Now the question is till the operation date company has provided depreciation as per companies act, and after the commencement the company has to provide depreciation as per electricity act. In both the cases the company is following SLM method of depreciation, only there is a change in rates. Whether it can be considered as change in accounting policy and whether retrospective effect for the same is required?.. please guide me.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

11 December 2015 It is not a change in accounting policy retrospective effect is not required. Companies Act depreciation is applicable during construction period and after commencement of commercial operation depreciation as per Electricity Act is applicable.
Declare it in the accounting policy.

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