14 October 2013
Hi... where can i get the correct depriciation rates for company fixed assets?? i need to check and charge from the year 2008 to till date. And if suppose dep on particular asset is say 10% in the year it was purchased, can it change as in the subsequent years?? Depriciation for company fixed assets should be charged by using WDV method or SL method?? which one is better to follow??Please help.
21 July 2024
To find the correct depreciation rates for company fixed assets under the Companies Act for the years from 2008 to the present, you typically refer to the schedules provided under the Companies Act. Here’s how you can approach it:
### Depreciation Rates as per Companies Act
1. **Schedule II of Companies Act, 2013:** - Schedule II provides the useful lives and depreciation rates for various categories of assets. - The rates are specified for each class of asset, and they are meant to be followed for charging depreciation.
2. **Changes in Depreciation Rates:** - Yes, there have been changes in the depreciation rates over the years due to amendments in the Companies Act and notifications issued by the government. - It's crucial to refer to the relevant schedules or amendments applicable for each financial year to determine the correct rates.
3. **Method of Depreciation:** - The Companies Act allows companies to use either the Straight Line Method (SLM) or the Written Down Value (WDV) method for charging depreciation. - The choice between SLM and WDV depends on factors like the nature of assets, accounting policies of the company, and tax implications.
### Finding Depreciation Rates
- **Companies Act Schedules:** You can find the latest schedules and amendments on the Ministry of Corporate Affairs (MCA) website or legal databases that provide updates on company law. - **Professional Advice:** Consulting with a chartered accountant or a tax advisor who specializes in corporate taxation can provide you with accurate rates applicable for each financial year.
### Changes Over Time
- **Notification Updates:** Amendments to depreciation rates are typically notified through government notifications or circulars. These updates specify changes in rates and sometimes in the method of depreciation (SLM or WDV). - **Historical Records:** If you need specific rates for past years (e.g., since FY 2008-09), reviewing old financial statements or audit reports may provide insights into the rates applied during those periods.
### Recommendation
- **Consistency:** Choose a method (SLM or WDV) that aligns with your company’s accounting policies and stick to it consistently. - **Compliance:** Ensure that the depreciation rates used comply with the Companies Act provisions applicable for each respective financial year.
By following these guidelines and seeking professional advice where necessary, you can accurately determine and apply depreciation rates for your company’s fixed assets over the years.
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