Depreciation

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Querist : Anonymous

Querist : Anonymous (Querist)

11 August 2015 If a company is amalgamated,how to calculate depreciation as per CA,2013..
That is, which date should be considered as the date of purchase of assets to arrive at depreciation rates?

Amol S Joglekar

Amol S Joglekar (Expert)
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11 August 2015 Schedule is based on USEFUL LIFE rather than posing difficulties in amalgamation proceedings.
Purchase Consideration must have taken care of value of asset. So let the date of purchase not play any role as such. Find out the remaining useful life, if any, with the help of management and /or engineer and /or valuer and accordingly calculate the depreciation rate.

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2015 Thank you.. What about the Cost of asset?
Should the WDV value be taken or the purchase consideration?

Amol S Joglekar

Amol S Joglekar (Expert)
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13 August 2015 Purchase consideration is the effect of net of assets and liabilities value that are taken over.
Try to trace out the sheet prepared by the purchasing management while acquiring the company. That will help you to find out the VALUE as on 01/04/2014.
The steps are
01. Compute the value as on 01/04/2014, taking into account the WDV
02. Compute the remaining useful life along with scrap value if any.
03. Apply the depreciation.

(For any further query, please give a specific example with numerical values.)

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