Dep. as per co. act - wdv method

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Querist : Anonymous

Querist : Anonymous (Querist)

28 September 2013 A Pvt ltd co. purchase 5 machines for 200000 lakh each on 1.4.2010. It charged dep. on 10 lakh as per co. act at wdv method. Now on 31.5.2011, it sold one machine. Then please tell the dep. as per co. act at wdv method for fy 2011-12.

CA. Sunil Kumar

CA. Sunil Kumar (Expert)
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29 September 2013 The Depreciation will be calculated on pro-rata basis till 30.05.2011

Dep Rate 13.91%
Single Shift

Dep for 10-11 Rs. 27,820/-
WDV at the begining of FY 11-12 172180/-

Days machinery used in FY 11-12 60 days
No. of Days in FY 11-12 366 days

Hence Dep 172180X13.91%X66/366 = 4319/-

Querist : Anonymous

Querist : Anonymous (Querist)

29 September 2013 Please tell dep. for the whole. See wdv as on 31.3.2011 will be 860900.After that dep for 60 days will be 21595. I am confused for the balance period. Whether to deduct cost of asset sold or what will be the total amount on which dep for 306 days will be charged.

Ganeshbabu K

Ganeshbabu K (Expert)
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04 October 2013 As on 31.03.2011 wdv is 860900
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in 31.05.2011 one machine sold out,,so out of 5 machines 1 machine put to use for 60 days and remaining machines put to use for 365 days...
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So caluculate depreciation accordingly
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however you need to deduct accumulated depreciation of sold machinery from Accumulated depreciation and cost of machinery from gross block,,profit and loss on sale of machinery to be recognised in profit and loss account under indirect income..
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Thanks & regards
Ganesh babu k

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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08 October 2013 As per companies act you have to calculate profit or loss on the assets which will not be considered in Income Tax and as suggested by the experts calculate as per their suggestion

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