Whether depreciation is considered for stock valuation purpo
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 December 2012
Sir, I am doing the Stock Audit of one company (Manufacturing Concern) on behalf of the bank. Can anyone please clarify me whether Depreciation is considered in Cost while calculating Drawing Power (DP) of the company. As per my point of view it should not be considered because first it is unavoidable cost and second only considered when plant is running at 100% capacity, but i am not sure about it. Please help me out and please provide the reasoning for your answer also and any reference from where i can also check this out.
Thanks in Advance
Waiting for response.
Thanks in Advance
Waiting for response.
CA Hardik Bunha
(Expert)
28 December 2012
it is a non cash expenditure. i think it should not be taken into consideration.
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