Depreciation Reserve

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SHIRAS (Querist)
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29 January 2011 i have a doubt. Deprecition reserve in tally what is the accounting head. is fixed asset? is it right?

year end journal entry would be

Deprecition Dr 1000
To Depreciation Reserve 1000
Deprecition reserve reduce the value of assets?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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29 January 2011 This is based on the method of accounting which you are following, some companies keep reserve system and some can be credited to fixed asset directly, so both the effect are same

while creating Depreciation reserve it need to be grouped as Fixed assets, the we can see the Fixed asset net effect in Balance sheet

Following Depreciation reserve method is good & recommened also

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SHIRAS

SHIRAS (Querist)
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29 January 2011 If the company is using Depreciation reserve. I think so the depreciation Reserve will be going to the liability side of the balance sheet.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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29 January 2011 it is nature of liability only but , it need to be gruoped under fixed asset for reducing the Fixed asset value in the balance sheet

SHIRAS

SHIRAS (Querist)
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29 January 2011 one of my friend said to me Depreciation reserve Under the heading of Reserve and surplus in Tally. It right or fixed assets group.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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29 January 2011 Depreciation reserve need to be in Fixed assets only, that the corect and fair presentation

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Vivek Raju P

Vivek Raju P (Expert)
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30 January 2011 Agreed with Mr Kkrishnan. Dep reserve or Accumulated Dep is a liability and at the time of creation of financial statements will be reduced from the fixed assets for presentation.

You will any way show a separate schedule showing the changes during the year.

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SHIRAS

SHIRAS (Querist)
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30 January 2011 Thank you Both of you

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