Depreciation
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
05 June 2012
Our client is charging depreciation on fixed assets based on useful life of assets(S.L.Method) under books.
I read that depreciation will be limited to 95% of the cost of assets?...pls tell...what will be done of 5% in books
Further there are some assets whose net block reduced to NIL although assets lies physically. Should we keep some value in that block
pls advise for the above two issues
I read that depreciation will be limited to 95% of the cost of assets?...pls tell...what will be done of 5% in books
Further there are some assets whose net block reduced to NIL although assets lies physically. Should we keep some value in that block
pls advise for the above two issues
06 June 2012
Query 1:
Excerpt from section 205 of Companies Act
(2) For the purpose of sub-section (1), depreciation shall be provided either -
(a) to the extent specified in section 350; or
(b) in respect of each item of depreciable asset, for such an amount as is arrived at by dividing ninety-five per cent of the original cost thereof to the company by the specified period in respect
of such asset; or
(c) on any other basis approved by the Central Government which has the effect of writing off by way of depreciation ninety-five per cent of the original cost to the company of each such depreciable asset on the expiry of the specified period
5% represents Scrap value.
Query 2:
Ideally it should have scrap value atleast. if not, then you may consider bringing the scrap value of tose assets.
if not, then carry the at Re 1.
Excerpt from section 205 of Companies Act
(2) For the purpose of sub-section (1), depreciation shall be provided either -
(a) to the extent specified in section 350; or
(b) in respect of each item of depreciable asset, for such an amount as is arrived at by dividing ninety-five per cent of the original cost thereof to the company by the specified period in respect
of such asset; or
(c) on any other basis approved by the Central Government which has the effect of writing off by way of depreciation ninety-five per cent of the original cost to the company of each such depreciable asset on the expiry of the specified period
5% represents Scrap value.
Query 2:
Ideally it should have scrap value atleast. if not, then you may consider bringing the scrap value of tose assets.
if not, then carry the at Re 1.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
