Depreciation as per schedule ii of companies act,2013
This query is : Resolved
26 June 2015
Hi....
I have doubt that as per Transitional provisions given in the Schedule II of the companies act, 2013, if remaining life of the asset is nil then carrying amount of the asset as on balance sheet date should be recognised in opening balance of retained earnings or may be charged to profit & loss account.
Whether this treatment should be done even though asset is still existing on balance sheet date??
Thanks in advance....
I have doubt that as per Transitional provisions given in the Schedule II of the companies act, 2013, if remaining life of the asset is nil then carrying amount of the asset as on balance sheet date should be recognised in opening balance of retained earnings or may be charged to profit & loss account.
Whether this treatment should be done even though asset is still existing on balance sheet date??
Thanks in advance....
26 June 2015
Remaining balance should be transferred to retained earnings. It will not impact profitability for the year. A disclosure is also required to be made in notes to accounts on impact due change in depreciation rules.
26 June 2015
Should be Charged From Profit And Loss Account And Also Notes to Account on impact due to Change in Probability Should Be Clearly Mentioned
26 June 2015
The word 'shall' is substituted by the word 'may' by notification dated 29-8-2014. Therefore, the company has two option viz.,
1. transfer the carrying amount ,after retaining the residual value, to reserve and surplus or,
2. carrying value may be shown as such in fixed assets and do not depreciate hereafter.
1. transfer the carrying amount ,after retaining the residual value, to reserve and surplus or,
2. carrying value may be shown as such in fixed assets and do not depreciate hereafter.
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26 June 2015
Mr Warrier The Amount Should be charged from Profit And Loss Account.You never claimed that Part of cost and Now you cant.You followed Old Law already
26 June 2015
May I request the questioner and the learned members to go though Notes 7(b) of Schedule II of the Companies Act,2013 and the subsequent notification dated 29- 8-2014 before analyzing my earlier observation on the issue.
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26 June 2015
Seen. Agree with views of Warrier Sir.
Two option available:
1) Charge it against the retained earnings. It will not impact your current year profit, as stated earlier by me.
2) Keep the residual value in the books as rightly suggested by Warrier Sir.
I was unaware of notification dated 29.08.2014. Thank you Warrier Sir for the Information.
Two option available:
1) Charge it against the retained earnings. It will not impact your current year profit, as stated earlier by me.
2) Keep the residual value in the books as rightly suggested by Warrier Sir.
I was unaware of notification dated 29.08.2014. Thank you Warrier Sir for the Information.
26 June 2015
Link of Notification Dated 29.08.2014:
https://www.mca.gov.in/Ministry/pdf/Amendment_Notification_29082014.pdf
Schedule II Point 7(b):
https://www.mca.gov.in/SearchableActs/Schedule2.htm
https://www.mca.gov.in/Ministry/pdf/Amendment_Notification_29082014.pdf
Schedule II Point 7(b):
https://www.mca.gov.in/SearchableActs/Schedule2.htm
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