Depreciation

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A.SANGEETHA (Querist)

28 April 2015 Dear Sir/Mam,

Can we calculate useful life of an Asset under WDV method of depreciation? Can we compare useful life of an asset under WDV as per companies act 1956 with useful life as per Companies Act 2013?

CA AnKiT BoHrA (AB)

CA AnKiT BoHrA (AB) (Expert)

28 April 2015 you can use or compare things for ur purpose... but in books u have to use dep as per comapnies act 13 na

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

28 April 2015 Useful life of the asset is given in Schedule II of Companies Act 2013. So you have to follow that. You can calculate WDV rate with given useful life of asset with following formula.

r = 1-(s/c)^(1/n)

Where,

r = rate of depreciation
s = scrap value
c = cost of assets
n = no. of year of life of assets

For example take Plant & Machinery:

r=1-(5/100)^(1/15)
=18.10%

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

28 April 2015 Depreciation to be calculated as per Companies Act 2013 from FY 2014-15 onward.

Check out Application Guide on the provisions of Schedule II to the Companies Act 2013 by Corporate Laws & Corporate Governance Committee of ICAI from link given below:

https://220.227.161.86/37329clcgc27675.pdf

Also Check out files from links given below:

https://www.caclubindia.com/files0512/160320_66209_depreciation__summary.pdf

https://www.caclubindia.com/files0512/1415307_66291_depreciation.pdf

Check out rates from link given below:

https://www.caclubindia.com/files0512/496179_59179_depreciation_rate_chart_companies_act_2013.pdf

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