depriciation

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daniel (Querist)
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21 June 2011 can a firm claim depriciation on rented depriciable asset?
note: in branch accounting(independent branches), claim depriciation on assets whose accounts are maintained by head office.
kindly reply.

CA Harish Suwalka

CA Harish Suwalka (Expert)
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22 June 2011 yes the depreciation can be claimed on rented assets if the ownership remained with us.
independent Branches can claim Dep on the assets which accounts are maintained by HO, in the case entry in branch a/c will be
Depreciation a/c dr. ****
to H.O. a/c ****

shakuntala chhangani

shakuntala chhangani (Expert)
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24 June 2011 Hi, dep. can not be claimed on rented asset. one need to be the owner of the asset to claim the same.
Branch is the part and parcel of the organisation, hence dep is allowed to organisation as a whole because finally consolidated balance sheet prepared by the co. is submitted to various authorities.
for internal accounting purpose, the asset a/c can either be maintained by branch or HO. If branch maintains the account, then the entry to be passed by branch will be :
Dep.
To asset a/c
If HO maintains the branch assets a/c, then the entry in the books of Ho will be :
Dep. a/c Dr.
To assets a/c
dep is finally allocated to branch which actually uses the assets by the entry :
Branch a/c Dr.
To dep A/c
for the same, branch passes the entry :
dep. A/c Dr.
to HO a/c
Regards, CA Shakuntala Chhangani

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