Depreciation

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Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2018 Dear Sir / Madam
In Charitable Trust balance sheet depreciation of fixed assets were never accounted since years. Now for some reason and to avoid tax it
is necessary to take depreciation on books. Now my query is how to take depreciation on fixed assets I mean the original value should be taken as opening balance of FY 2017-18 of any fixed asset or will have to take from year of original purchase and how much amt is allowable. e,g, If the opening balance of Furniture is say Rs.100/- as on 01.04.2018 and it was purchase in the year say 2013-14 then 10% of 100 means Rs.10 is be taken as depreciation or otherwise Please explain.
Thanks in advance.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 July 2018 Ideally, the depreciated value to be taken as WDV, and the depreciation up to the
date of change may be routed through 'prior period adjustments' to capital fund a/c
with a disclosure in the 'notes on accounts'.

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Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2018 Dear Warrier Sir please explain in easy language i.e. which value should I take as WDV ?
Original purchase value (i.e OB of FY 201718 as no depreciation was taken prior to FY 201718) or
every year from purchase year to be taken and resultant value of opening balance in Fy 201718 to be taken as WDV.

Thanks in advance

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 July 2018 Opening balance is the 'resultant value'.

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Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2018 Thank you very much Warrier Sir..... I understood , If I have purchased say Rs.100 value furniture in April-2015-16 then 100-10=90(for 201516),
90-9(81 for 201617) so Rs.81 to be taken as WDV for 201718 and 81-8=73 so in all Trust can claim only Rs.8 depcreciation on basis of WDV and not Rs.10. so in this case as no depreciation was taken in earlier year WDV for 2017-18 will come as 100-8=92. Sir, Have I understood correctly. ? please reply

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