DEP RATES AS PER COMPANIES ACT 2013
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Suresh S. Tejwani
(Querist)
26 December 2024
WHAT IS THE LOGIC BEHIND 11.88% DEP RATE ON PLANT AND MACHINARY IN COMPANIES ACT 2013?
Dhirajlal Rambhia
(Expert)
26 December 2024
The Companies Act 2013 assigns a useful life of 8 years to these types of plants when calculating depreciation using the Written Down Value (WDV) method.
Depreciation Rate = 1 - (Salvage Value / Original Cost)^(1/Useful Life)
In this case, it's assumed that the salvage value is zero (or negligible). So the formula simplifies to:
Depreciation Rate = 1 - (0)^(1/8) = 1 - 0.8812 = 0.1188 or 11.88% (approximately)
https://gstguntur.com/depreciation-rate-chart-as-per-companies-act-2013-with-related-law
Depreciation Rate = 1 - (Salvage Value / Original Cost)^(1/Useful Life)
In this case, it's assumed that the salvage value is zero (or negligible). So the formula simplifies to:
Depreciation Rate = 1 - (0)^(1/8) = 1 - 0.8812 = 0.1188 or 11.88% (approximately)
https://gstguntur.com/depreciation-rate-chart-as-per-companies-act-2013-with-related-law
Suresh S. Tejwani
(Querist)
26 December 2024
PLEASE EXPLAIN WITH EXAMPLE THE ABOVE FORMULA
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