Minimum wdv under slm method.
This query is : Resolved
CA. Sameer Swain
(Querist)
16 November 2011
My Query is as follows:
Company is charging depreciation under SLM.Company has a practice that when the WDV is 5% or less than 5% of Cost of Acquision of the said asset then no further depreciation shall be provided on such WDV. So e.g. if original Cost of acquisition of an asset is Rs. 10 Lacs and its WDV reached Rs.50000 or less(i.e. 5% of 1000000},then no depreciation shall be charged on such asset and such asset shall be carried forward at such WDV.
Is the practice is as per law.
Company is charging depreciation under SLM.Company has a practice that when the WDV is 5% or less than 5% of Cost of Acquision of the said asset then no further depreciation shall be provided on such WDV. So e.g. if original Cost of acquisition of an asset is Rs. 10 Lacs and its WDV reached Rs.50000 or less(i.e. 5% of 1000000},then no depreciation shall be charged on such asset and such asset shall be carried forward at such WDV.
Is the practice is as per law.
CA Neha Jain
(Expert)
17 November 2011
Yes, it is as per section 349 of the Companies Act.
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