15 September 2008
FOR PLANT & MACHINERY & BUILDING IS REVALUED AND CRADITED THE DIFFERENCE AS REVALUATION RESERVE IN THE BALANCE SHEET. NEXT YEAR WHEN DEPRECIATION IS CHARGED ON ASSETS HOW THIS IS TO BE TREATED?
(1) TOTAL DEPRECIATION TO BE CHARGED TO P&L A/C ON NEW VALUE OR (2) THIS IS TO BE DIVIDE IN TWO (A) ACTUAL DEPRECIATION TO BE CHARGED TO P&L a/C AND ON THE RE VALUATION DEPRECIATION TO BE REDUCED FROM THE REVALUATION RESERVE EVERY YEAR AS PER THE % OF THE EACH ASSET.
PLS CNFM AS PER IFRS (INTERNATIONAL FINANCIAL REPORTING STANDARDS)
17 September 2008
FOLLOWING COMMENT GIVEN BY BY ONE OF OUR FINANCE MANAGER. PLS COMMENT.
AS 6 – Depreciation Accounting of ICAI has been revised W.E.F 1-4-2008 with the objective of aligning the Indian GAAP with IFRS. And as far as IFRS is concerned depreciation on revalued assets should be charged to P&L. For your kind reference a publication by Ernst & Young is attached; please go through section 4.7 in Page 29.Other wise you can go to IASB website for official pronouncement. Often this CA CLUB INDIA provides wrong advises as there is obligation on their part
CAclubindia
