Depreciation
This query is : Resolved
11 May 2012
WHAT IS METHOD OF DEPRECIATION CALCULATION.
WHAT IS WDV & SLM IN COMPANY ACT?
WHAT IS WDV & SLM IN COMPANY ACT?
11 May 2012
Method of calculating depreciation is as under:
Income Tax Act - Only WDV method allowed.
Companies Act - Either SLM or WDV method can be followed.
SLM - Straight Line Method
Calculation:
(Cost less Scrap Value)/Life
Under this method the cost of the asset is spread over the useful life of the asset.
WDV - Written Down Value
In this case the depreciation is charged at a specified percentage on the diminishing balance.
Income Tax Act - Only WDV method allowed.
Companies Act - Either SLM or WDV method can be followed.
SLM - Straight Line Method
Calculation:
(Cost less Scrap Value)/Life
Under this method the cost of the asset is spread over the useful life of the asset.
WDV - Written Down Value
In this case the depreciation is charged at a specified percentage on the diminishing balance.
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