Depreciation

Save Share

This query is : Open

satish nagamalla (Querist)

12 December 2011 Depreciation is to be charged at flat rate as per companies act.Is it correct?but however as per guidance note on depreciation "assets newly acquired,assets sold during the year & financial year with period leass than year" it is to be calculated on prorata basis.Finally the total effect become proportionate basis but not on flat rate?Plz clarify if my understanding is incorrect

CA Sreenivasa Rao Munaga

CA Sreenivasa Rao Munaga (Expert)

13 December 2011 In that case also (where assets newly acquired, assets sold during the year & financial year with period less than year), depreciation will be calculated at the flat rate as provided in the companies act and later it will be proportioned based on the number of days those assets were utilized in the business.

As per the companies act, depreciation will be provided for the number of days that assets are used in the business.

Please let me know if u have any doubts.

Thanks,
CA M Sreenivasa Rao.

Message likes : 1 times

satish nagamalla

satish nagamalla (Querist)

14 December 2011 When to charge depreciation,i guess it is end of the year or before issuing interim dividend .it is also said later it should be adjusted to number of days used in the business.when to make this adjustment?Is it also end of the year

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