Depriciation transaction

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F H G (Querist)
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23 November 2009 What is the use of
Accumulated Depriciation?
Give an example transaction for
accumulated depriciation.

Can we post depriciation monthly twice?

Thanks in advance
fazle_sap_fi@yahoo.in

shakuntala chhangani

shakuntala chhangani (Expert)
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23 November 2009 when rather than deducting the amount of dep. from asset a/c, it is accumulated in a separate A/c called provision for dep A/c. In this case asset account will appear at cost and the dep. gets accumulated in PFD A/c. at any point of time if you want to know WDV of the asset, it is the difference between ORIGINAL COST AND THE AMOUNT ACCUMULATED IN pfd a/C.
it is the way of presentation. ewhatever is the use/purpose of providing dep, the same is the objective of PFD A/c with the only difference that rather than cr. Asset A/c you Cr. PFD A/c.
yes, you can pass the entries for dep at once or twicw a month depending upon your MIS. normally entries for dep are passed at the year end by passing JV. Regards,
CA Shakuntala Chhangani

GSTP Hari Dhayalan Konar

GSTP Hari Dhayalan Konar (Expert)
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23 November 2009 nice explanation. thanks

F H G

F H G (Querist)
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23 November 2009 Thank you sir

Madhusudan Bohra

Madhusudan Bohra (Expert)
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23 November 2009 FAZEL,

Though there are two diff. ways of presentations :
1. reducing depreciation from asset value and showing net asset value in Fixed Assets. Or

2. Showing separately gross value of assets in Fixed assets and Accumulated depreciation in liability account.

As per IAS 16, fincial statement need to reflect Cost of asset and accumulated depreciation separately and hence option 2 is strongly recommended.

Cost of Assets are required in many cases viz. during insurance claims, transfer of assets withing the group, etc. Option 2 give long term solutions to all these issues.

Depreciation is calculated on daily basis. It is only matter of processing the depreciaton and passing the entry which can be done any time as per requirement.

Hope it clarifies the question.

PL. comment.

F H G

F H G (Querist)
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24 November 2009 Yes Sir I got it
Thanks very much

shakuntala chhangani

shakuntala chhangani (Expert)
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24 November 2009 Hey Fazel, I am mam n not sir. Mr. Bohra has given nice answer as per IAS. the same is there in Schedule VI (fixed assets Schedule)to the cos. Act also.

F H G

F H G (Querist)
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30 November 2009 Thank you Shakuntala mem.
Can u give me ur email id.
I am an SAP FICO Consultant.

fazle_sap_fi@yahoo.in

Thks.

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