Dep. as per companies act

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When an asset is purchased late in the financial year, like March 2026, its depreciation calculation for the following year (FY 2026-27) needs careful consideration. While FY 2026-27 is the asset's second year for accounting purposes, its 'used life' is measured in days from the purchase date. Therefore, the remaining useful life entering FY 2026-27 is calculated by subtracting the days already used from the total useful life, and full depreciation for 365 days is charged in FY 2026-27.

jaya

jaya (Querist)

29 September 2026 Hi,
if we have bought an assets in mar'26 and calculated the depreciation accordingly (depreciation on usage as per number of days)...in next year the "used/remaining life" will be 2nd yr or it will be 1yr (as it was bought in march'26)

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

30 September 2026 FY 2026–27 is considered the asset's 2nd financial year for accounting and register tracking. However, its "used life" from March 2026 is counted only in exact days (not 1 full year), and the remaining useful life entering FY 2026–27 is Total Useful Life minus Days Used in March 2026. For FY 2026–27, you charge full 365-day depreciation.

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jaya

jaya (Querist)

01 October 2026 Thank you for the reply..

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