Whether to include purchase date in calculation of dep. ?
This query is : Resolved
CA Dron Bharadwaj
(Querist)
24 August 2012
DEPRECIATION AS PER COMPANIES ACT, 1956:
Asset purchased on 20th November, 2011.
Whether the depreciation will be calculated from 21st November or from 20th November itself ?
(Whether to include purchase date or not ?)
Please support your answer with relevant judgment, law etc. (If any)
Asset purchased on 20th November, 2011.
Whether the depreciation will be calculated from 21st November or from 20th November itself ?
(Whether to include purchase date or not ?)
Please support your answer with relevant judgment, law etc. (If any)
Guest
Guest
(Expert)
25 August 2012
As per Schedule XIV of Companies Act, 1956 the company can calculate the depreciation by using either Straight Line Method or Written Down Value Method.
The rate to calculate depreciation is also specified in Schedule XIV.
If any addition has been made to any asset during the financial year, depreciation on such an asset will be calculated on pro-rata basis from the date of such addition or upto the date on which such asset has been sold.
The rate to calculate depreciation is also specified in Schedule XIV.
If any addition has been made to any asset during the financial year, depreciation on such an asset will be calculated on pro-rata basis from the date of such addition or upto the date on which such asset has been sold.
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