Depreciation as per companies act
This query is : Resolved
06 July 2012
Dear Sir
Some of our assets are not temporarily in use due to spare capacity pursuant to decline in market demand. However, this phenomenon is temporary and accordingly use of these assets may vary from month to month - one month they are not used and in another month they are used. Is it possible not to charge depreciation on these assets in the months / period during which these are not used for production.
Some of our assets are not temporarily in use due to spare capacity pursuant to decline in market demand. However, this phenomenon is temporary and accordingly use of these assets may vary from month to month - one month they are not used and in another month they are used. Is it possible not to charge depreciation on these assets in the months / period during which these are not used for production.
07 July 2012
Depreciation is a cost for wear and tear of assets. Even if the asset is idle for intermetent period, depreciation continues. There is only once exception when the asset is retired or held for sale, when depreciation is stopped and the asset is stated at WDV or NRV, whihcever is lower.
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