How to account for the Depreciation in the below circumstanc
This query is : Resolved
21 April 2009
Hi,
An asset purchased and wrongly debited to p & l Account. Subsequently it was traced out and capitalised. Now what is the accounting entry to be passed for the Depreciation not effected in the earlier accounting records.
An asset purchased and wrongly debited to p & l Account. Subsequently it was traced out and capitalised. Now what is the accounting entry to be passed for the Depreciation not effected in the earlier accounting records.
21 April 2009
The entry will be: (normal entry which we pass usually)
1) Depreciation Account....Dr. xxx
To Asset Account xxx
(For depreciation)
2) Profit and Loss Account ...Dr. xxx
To Depreciation account xxx
(For transfer of depreciation to profit and loss account)
Please note that the amount of depreciation will be calculated as if the asset is capitalised since its inception. AS-6 states that the depreciation should be accounted with retrospective effect. it means the amount of depreciation will include the depreciation from the date on which asset is put to use.
1) Depreciation Account....Dr. xxx
To Asset Account xxx
(For depreciation)
2) Profit and Loss Account ...Dr. xxx
To Depreciation account xxx
(For transfer of depreciation to profit and loss account)
Please note that the amount of depreciation will be calculated as if the asset is capitalised since its inception. AS-6 states that the depreciation should be accounted with retrospective effect. it means the amount of depreciation will include the depreciation from the date on which asset is put to use.
21 April 2009
pass one rectification entry
Assets A/c ___________Dr.
To P/L Account
(note: the amount of the entry will be cost of assets minus depreciation,[ which had been charged if the assets was capitalised as on date of purchase ]
Assets A/c ___________Dr.
To P/L Account
(note: the amount of the entry will be cost of assets minus depreciation,[ which had been charged if the assets was capitalised as on date of purchase ]
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Opting our of sec 44AD
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- Transporter Declaration form
- Regarding TDS Applicability For Director Remuneration
- Multiple trade mark
- Value of property in capital gain
- LC charges in relation to Asset purchased should be Capitalised ?
- Copyright software
- SALE OF MOTOR CAR BY REGISTERED INDIVIDUAL
- RULE 86B APPLICABILITY IN QRMP TAX PAYER
- Regarding appeal to GSTAT
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
