Query: Depreciation as per Company Act 2013

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This query is : Resolved

Hukam Chand (Querist)

04 May 2023 Dear CA Club Team,
Actully, I have 2 Little question Kindly Help me I purchase an office equipment on 31/07/2020 of Amount of Rs. 11,101.68 My Advocate Charge the depreciation as per B/sheet figure on 31.03.2021 like: 3,330.68 but my as per my calculation depreciation is become 7547/- Pls help me for this practical query.
And Second Same Case : I purchase an office equipment 03/11/2021 of amount of Rs. 1,07,583.88 and my advocate charge the depreciation 22,930/-
Pls help me for this practical query.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

10 July 2024 It seems like you have concerns regarding the calculation of depreciation for office equipment purchased on different dates. Let's address each case separately:

### Case 1: Equipment purchased on 31/07/2020
- **Purchase Amount:** Rs. 11,101.68
- **Advocate's Depreciation:** Rs. 3,330.68 as of 31/03/2021
- **Your Calculation of Depreciation:** Rs. 7,547

#### Explanation:
1. **Depreciation Methodology**: Depreciation can be calculated using different methods such as Straight Line Method (SLM), Written Down Value (WDV) Method, etc.

2. **Period of Calculation**: The advocate might have calculated depreciation based on the period from 31/07/2020 to 31/03/2021 (about 8 months), whereas your calculation seems to cover a different period or might be using a different method.

3. **Adjustments**: Ensure that the depreciation method used is appropriate for your business and compliant with accounting standards.

### Case 2: Equipment purchased on 03/11/2021
- **Purchase Amount:** Rs. 1,07,583.88
- **Advocate's Depreciation:** Rs. 22,930

#### Explanation:
1. **Depreciation Calculation**: Similar to the first case, the advocate's calculation of depreciation might be based on the method and period they have chosen (likely from 03/11/2021 to the balance sheet date).

2. **Alternative Calculation**: Your calculation of Rs. 22,930 might be based on a different method or covering a different period.

#### Steps to Resolve:
1. **Review Methodology**: Check with your advocate or accountant regarding the depreciation method used. Ensure it aligns with your business needs and complies with accounting standards (like Indian Accounting Standards or Income Tax Act requirements).

2. **Adjust if Necessary**: If you believe your calculation is more accurate or compliant, discuss it with your advocate or accountant. They can help adjust the figures appropriately in your financial statements.

3. **Documentation**: Maintain clear records of the depreciation calculations and discussions with your advisor for future reference and compliance audits.

In both cases, clarity on the depreciation method, calculation period, and compliance with relevant regulations will help resolve discrepancies and ensure accurate financial reporting for your office equipment.

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