Depreciation on plant & machinery

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Rahul Poddar (Querist)
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26 October 2013 dear Sir,

Please advise what is the treatment of Fixed asset in Balance Sheet (as per Companies Act, 1956) when WDV Of Any Fixed Asset has come below 5% of its original cost.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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26 October 2013 It should be fully written off from books of accounts.

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Rahul Poddar

Rahul Poddar (Querist)
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26 October 2013 sir can you refer me the section or schedule which governs this writing off of assets

Nikhil Kaushik

Nikhil Kaushik (Expert)
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27 October 2013 Dear Rahul,

There is no need for any reference to any section. Providing for depreciation is mandatory as per law. Once the whole of the value of the asset is depreciated, it is often kept at Re 1 in order just in order to reflect its existence in the asset block.

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Rahul Poddar

Rahul Poddar (Querist)
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27 October 2013 in balance sheet if asset is shown at Rs.10000 which is les than 5% of its cost,is it mandatory to write it off or can shown at rs 10000

Nikhil Kaushik

Nikhil Kaushik (Expert)
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27 October 2013 you have write off till it reaches Rs 1. There you may stop

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