Can depreciation rate be increase under companies act?
And wether the rate under company act is minimum, So if we depreciat our asset more the or just greater then the act which mistake we got leter so can we adjust this depreciation?
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Can depreciation rate be increase
Replies (2)
Hi Arun,
Our Companies Act provides only the rate that is minimum one company has to provide in its books. It does not restrict you to provide higher depreciation. You can provide higher depreciation subject to you have some reasonable basis for that. Like life of asset, example suppose if you have leased land, you will depreciate it over the lease period of asset, which may be higher than the rates prescribed in Companies Act.
If you dont wanted to provide higher rate but you have wrongly provided higher depreciation, you can adject the same during the current year depreciation. I am not sure whether it has to be adjested thorugh prior period items or not.
I hope I have replied to you query. If further any thing keep writing.
Good One Satyendra I am totally agree with you.
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