Depreciation as per Companies Act,1956
This query is : Resolved
05 January 2010
As per NOTES to SCHEDULE XIV :
"Provided that where the aggregate actual cost of individual items of plant and machinery costing Rs. 5,000 less constitutes more than 10 per cent of the total actual cost of plant and machinery, rates of depreciation applicable to such items shall be the rates as specified in Item II of the schedule."
Example :
there is 1 heater and 1 machinery under head Plant & Machinery :
A-29000
B-15500
addition in A-4000
as it is less than 5000 and also less than 10% of 29000(10% of A),it
will be depreciated @ 100 % ?
OR
as it is less than 5000 and not less than 10% of 44500(29000+15500),it will be depreciated at normal rates ?
"Provided that where the aggregate actual cost of individual items of plant and machinery costing Rs. 5,000 less constitutes more than 10 per cent of the total actual cost of plant and machinery, rates of depreciation applicable to such items shall be the rates as specified in Item II of the schedule."
Example :
there is 1 heater and 1 machinery under head Plant & Machinery :
A-29000
B-15500
addition in A-4000
as it is less than 5000 and also less than 10% of 29000(10% of A),it
will be depreciated @ 100 % ?
OR
as it is less than 5000 and not less than 10% of 44500(29000+15500),it will be depreciated at normal rates ?
07 January 2010
1) Total cost of machinery -- Rs. 44,500/-
2) 10 % thereof -- Rs. 4,450/-
3) Addition -- Rs. 4,000/-
4) Permitted limit -- Rs. 5,000/-
As amount in(3) is less than (2) and (4) addition can be depreciated @ 100 %.
2) 10 % thereof -- Rs. 4,450/-
3) Addition -- Rs. 4,000/-
4) Permitted limit -- Rs. 5,000/-
As amount in(3) is less than (2) and (4) addition can be depreciated @ 100 %.
07 January 2010
it means if the comapny has purchased 5 room heaters,
all the 5 room heaters can be depreciated at the rate of 100%.
in short :
each room heater will be regarded as individual plant & machinery so each heater is below 5000,hence depreciated at the rate of 100%.
all the 5 room heaters can be depreciated at the rate of 100%.
in short :
each room heater will be regarded as individual plant & machinery so each heater is below 5000,hence depreciated at the rate of 100%.
04 February 2010
thanks
04 February 2010
thanks sir
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