Dep calculation 2013 as per wdv

Why wdv calculation formula not working in case of life is in fractions... For e.g... original cost of asset =11800 Scrap value = 5% of 11800=590 Useful life = 1.5 years Rate of dep= 86.42% 1st year dep= 10198 2nd year dep= 1602*86.42%*0.5 = 692... Remaining Wdv after 1.5 yrs= 910..... wdv should be 590 after useful life . why there is a difference???
Replies (6)

From where you found the useful life of the asset is 1.5 yrs

I have just taken an example....
I have just taken an example....

ok. as per your example solution is :

Scarp value - 590

Carrying cost as on 01.04.2014 is 11210

Therefore, rate of dep  is 86.43% and deperciation for the year 2014-15 is 9689 (86.43% *11210)

WDV as on 31.03.2015 is 1521 nad dep rate is 84.96%

Depreciation is 1521 so wdv at the end is 0.

and scrap value will be transferred to profit and loss ac

 

u mean to say... last year dep will be balancing figure

Dear Jatin,

Rate of Depreciation under WDV doesn't work for fraction of year or for days/months calculation since it is derived through yearly compounding. It will work only when you take complete year for calculation of depreciation.  My suggestion is, compute depreciation as above and in the last year take depreciation= Carring value/WDV less scrap value say 5%.

Regards,  

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