Cost in case of chosing wdv method

Hi Experts,

 As per AS 6, what should be the amount of cost on which depreciation would be calculated on choosing WDV Methos

Say,

Cost 100000

SV 5000

Life 10 Years

In SLM : Cost will be 100000-5000 =95000 on this depreciation will be distributed 9500 in 10 years

What will happen while choosing WDV

Say rate comes 20% for 10 years

Cost will be 95000 or 100000 on which depreciation will be calculated ?

Basis or standards line, if shown, will be added advantage.

 

Thanks

Replies (2)

As per WDV Method, Depreciation shall be caluculated on Rs 100000.

As per Sec 43(1) which deals with the Actual Cost.

Actual Cost is the cost what you have actually paid for the assets.

So, for WDV Method, You have paid Rs 100000, and hence this Rs 100000 shall be the actual cost for calculating Depreciation.

Hope Reply is satisfactory.

Originally posted by : sanjeet
 

Hi Sanjeet,

 then why on SLM basis salvage value is deducted for calculating dep ?

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