As - 11 foreign exchange difference on fixed assets

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As per AS-11 change in foreign exchange in long-term monetry assets (fixed assets, long term liabilities) in cost of fixed assets at the year end.

My ques is this that whether dep has to provide on that addition (due to adding/deduction for exchange difference)

 

PLZ its imp.

Replies (7)

You can provide depreciation as per Companies Act but for Income Tax you have to follow Sec 43A of Income Tax act and SC decision in Arvind Mills Case.

As per Income tax act you can provide depriciation on escalation due to exchange rate fluctuation as it would be capitalised and enter into block of assets u/s 43A only when actual  payment is made.

Agreed with Ms. Sneha

i agree wid all. But my ques is whether on 31st march, dep is to be charged or not. If yes than at what rate and for what period.

tx @ sankalp and if payment is made before 31st march then you can charge depriciation.dep will be provided on opening wdv+escalation in cost on Exchange rate fluctuation

Yes Sneha you can provide depreciation if payment is made before year ending.

If payment is made after balance sheet date but before date of auditor's report then please check "subsequent events requiring adjustments" in AS 4.

And for Income tax purpose your opinion is very true depreciation will be available only when actual payment is made.

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