Depreciation

Save Share

This query is : Resolved

srikant jha (Querist)

18 April 2014 Dear Sir/ Madam,
We purchased machinery for Rs.450lakh in July 2011 and charge depreciation on SLM basis @ 4.75%. In Dec 2013 we received subsidy from government for Rs.88 lakhs. what should be the treatment of subsidy received and depreciation calculation after subsidy received for the period ended 31.03.2014????

Rupesh Jain

Rupesh Jain (Expert)

21 April 2014 PLS MAKE SURE THAT SUBSIDE FOR PURCHASE OF MACHINERY. OR OTHER EXP. OR VAT AMOUTN REIMBURSEMENT.

IF DIRECTLY RELATED WITH MACHIDNERY THEN YOU CAN REDUCE THE COST OF MACHINERY AND
ALSO GIVE IN THE NOTES ON SUBSIDE THAT YOU RECD SUBSIDE.

srikant jha

srikant jha (Querist)

21 April 2014 Thanks for reply. Subsidy direct related to Machinery. But after the subsidy received what will be the depreciation effect if we use SLM method. From purchase year we charged machinery on gross book value. In those year we charged depreciation including subsidy amount. What will the effect of the depreciation already charged on subsidy amount.If WDV method followed than it is clear that just deduct subsidy amount from WDV and prospectively charged depreciation. What will be effect if SLM followed.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now