Depreciation wrong accounting

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2012 hello experts,
a 2 year old company having turnover of around 72 crores is charging depreciation .at slm rates. but when i saw the fixed asset schedule, they are using the method of wdv calculation.. for calculating depreciation and are charging slm rates because as per companies act the slm rates are low.
i beleive this is incorrect method for calculating depreciation under slm method..
now, hw should i proceed in this situation?

also it will be helpful if u can guide me whats the appropriate method for calculating depreciation under slm method?

should i make them change to wdv method and make retrospective changes ?

and also how to disclose deferred tax liability, since that amount will also change.

pl respond

thanks

Vineet

Vineet (Expert)

07 September 2012 In that case just note down the accumulated depreciation till 2011 at the current slm rate.
now change the rate to correct wdv rate. now note down the difference and charged as current year depreciation.
now current year depreciation would be dep for 2012 and this difference.
this create the problem in dep resonability but you have the reason for the same.

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