Clarification on Fixed Assets

Hi -

We have purchased an assets worth Rs.200Lacs in Dec 2008, and we have provided the Depreciaiton Year on Year, After two years, due to technical fault, assets got damaged partially. Vendor also accepted to issue a credit for Rs.25lacs for his mistake. I would like to know ,how should i treat the credit note in my books of account? whether i need to deduct from my asset value, if so, should I reverse the depreciation as well? else should I charge into other income?

Could you pls share the case study, if you have?

Thanks & Regards,

Shankar G