Depreciation as per new act
This query is : Resolved
08 July 2015
Dear Sir
For example if 'A' purchased a software for Rs.50000. And its yearly renewal charges are Rs.5000.How i need to depreciate this?
As per my view we need to depreciate the software as per the life said in the schedule i.e.3 yrs and the renewal charges need to charge to p&l A/c.Is this is correct or not.
And while depreciating we need to consider residual value and finally how we need to account this residual value?
Thanks in Advance.
For example if 'A' purchased a software for Rs.50000. And its yearly renewal charges are Rs.5000.How i need to depreciate this?
As per my view we need to depreciate the software as per the life said in the schedule i.e.3 yrs and the renewal charges need to charge to p&l A/c.Is this is correct or not.
And while depreciating we need to consider residual value and finally how we need to account this residual value?
Thanks in Advance.
08 July 2015
No life has been specified for software, the life of computers is specified as 3 years. Software can be depreciated over a period of 10 years or its useful life which ever is earlier. No residual value can retained for software it has to be fully depreciated.
08 July 2015
Thanks sir
In case of other assets what we need to do with that residual value.I mean how we account that?
In case of other assets what we need to do with that residual value.I mean how we account that?
08 July 2015
Thanks sir
In case of other assets what we need to do with that residual value.I mean how we account that?
In case of other assets what we need to do with that residual value.I mean how we account that?
08 July 2015
No need to account separately residual value. Depreciate only up to 95%, the balance 5% remain in asset value, which has to adjusted while disposing the asset.
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