18 May 2015
Suppose the life of asset prescribed under companies Act 2013 is 5 years and the asset has been used for 7.5 yrs. till 31.03.2014,what amt should should be charged to retained earnings and what should be the net WDV?
What should be the treatment if there is any addition in the asset during the year?
18 May 2015
As per the revised Companies Law maximum 5% amount can be taken as the reserve value i.e scrap value at last.
so assuming you are taking same.
The net wdv(closing) should be 5% which should be ideally transferred for asset disposal account.
Amount charged to Retained Earnings shall be the excess amount WDV which is pending as at the year end date for which wdv exists but balance life is NIL.
Treat any new addition as a separate asset as this is the case with Companies act .. unlike income tax act where the asset becomes part of block.
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