Depreciation
This query is : Resolved
10 March 2010
is depreciation cumpulsory under the companies act, 1956 by refferinmg to AS-6
13 March 2010
Hi hitesh,
charging depreciation is compulsory.
rates of depreciation have been mentioned in the companies act schedules. if the company policy is in line with those it is in compaliant with the comapnies act.
however, as an auditor you need to report whether the company has complied with all the applicable accounting standards. and AS - 6 is one which will apply to all the entities. hence it is implied that the company should be adopt the depreciation policy which is in line with both AS 6 and Companies ACT.
charging depreciation is compulsory.
rates of depreciation have been mentioned in the companies act schedules. if the company policy is in line with those it is in compaliant with the comapnies act.
however, as an auditor you need to report whether the company has complied with all the applicable accounting standards. and AS - 6 is one which will apply to all the entities. hence it is implied that the company should be adopt the depreciation policy which is in line with both AS 6 and Companies ACT.
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