Depreciation

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sindhu (Querist)

26 June 2014 sir,
can depreciation can be calculated as per useful life, if we calculated as per useful life of the asset(computer) if any netblock of the asset remains even if the useful life asset is completed how we have shown in the books as per as6.
for example
asset value:10000
useful life:3
rate of percentage:16.21%
net block after 3yrs: 5137
in this case net block of the asset is remained and useful life is completed how to recongnise the dep in the books
please solve the query urgent.

Rupesh Jain

Rupesh Jain (Expert)

26 June 2014 16.21% is minimum rate of dep. as per company act.
you can charge excess dep. in starting years of assets.

now you can sale the assets and bal amount you can calim as loss on sale of assets.

sindhu

sindhu (Querist)

26 June 2014 thank u sir
but company is not charging excess depreciation it is shown in gross block of the asset with out charging dep.
if excess dep is to be calculated we have to give retrospective effect

sindhu

sindhu (Querist)

27 June 2014 sir,
The useful life of a depreciable asset is shorter than its physical life what is the accounting treatment,how the entries should reflect in the books.

Rupesh Jain

Rupesh Jain (Expert)

27 June 2014 till you are not sell the goods you can not book the loss on assets.

when you make sale

cash/bank a/c 1000 (for example sale price)
to assets A.c 1000

loss on sale of assets a/c dr. 4137
to assets a/c 4137

sindhu

sindhu (Querist)

27 June 2014 sir,
there is no loss on assets.
the gross value asset (computer): 16000
date of purchase:01-04-2008
useful life:3yrs
depreciation value for 3yrs:7781
net block of the asset:8219
here the asset is not fully depreciated it means even net block is reflecting in the books,but the useful life of the asset is completed, here the company is not selling or write off the asset,there are using the asset in company but they are not calculating the dep on the same, as there reply is useful life of asset is completed.whether this treatment is correct or we should calculate the dep.
please solve this query very urgently.

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