Fixed Assets

This query is : Resolved

Yajuvendra Rawat (Querist)
Follow

28 November 2009 Dear Friends,
In our company three cars were purchased & fitted with a CNG kit. Expenses for conversion into CNG were debited to the Fixed Asset itself. I have heard that a car engine running on petrol has a longer life as compared to engine running on a CNG. Since we are following W.D.V. method with a fixed rate every year, is it possible for us & our management to shift the current rates to higher rates for the above given cars. Can these have a higher rate of depreciation than the normal ones. Please help me on this

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
Follow

06 December 2009 When there is a change in estimated useful life (useful life is shorter than the physical life); the balance in the asset account (wdv) should be divided by the useful life and calculate the rate of depreciation accordingly applicable for wdv method.

For example; cost of car was Rs.10 lac having a useful life of 8 years. At the end of 5 year; estimated life is now 7 years. Then the balance at the end of 5 year in the car account is to be absorbed in 2 years remaining.

If management is not providing the correct picture despite knowing the fact; it means book results are not true.

CA Rakhecha
Surat

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

MAYANK

Vivekanand Sagar

nilesh

yadagiri

Mohit Kumar

Subscribe Now

Fixed Assets

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA