Can depreciation can be calculated on LIFO basis?
If a partnership firm has be following FIFO basis to calculate depreciation, Can it change to LIFO basis now?
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Depreciation
Replies (7)
DEPRECIATION IS CHARGED ON THE ASSET PUT TO USE FOR P & M & FOR OTHER ON DATE OF PURCHASE
Hi Indhumathi
Depreciation is calculated on the value of assets (as per companies Act/AS) or on the value of block of assets (as per income tax)..
LIFO/FIFO is valuation method of stock. So it is not relevant for depreciation calculation.
Depreciation is allowed to a prtnership as per Income Tax Act 1961 section 32 which gives the benefit from the date of acquisition and put to use.
| Originally posted by : Sanat kumar | ||
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Hi Indhumathi Depreciation is calculated on the value of assets (as per companies Act/AS) or on the value of block of assets (as per income tax).. LIFO/FIFO is valuation method of stock. So it is not relevant for depreciation calculation. |
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yes agree with Sanath
| Originally posted by : Sanat kumar | ||
|
|
Hi Indhumathi Depreciation is calculated on the value of assets (as per companies Act/AS) or on the value of block of assets (as per income tax).. LIFO/FIFO is valuation method of stock. So it is not relevant for depreciation calculation. |
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agreed
Hi friends thanks for replying. Please calculate deprication in the follwoing case
| Fixed Assets | Opening | Addition | Deletion | |
| Balance | Upto Oct 3rd | After Oct 3rd | ||
| 15% rate | - | |||
| 1. A.C. | 12,754.65 | - | - | - |
| 2. Car | 59,791.52 | 747,371.00 | - | 100,000.00 |
| 3. Mobile phone | 1,623.40 | - | - | - |
| 4. Plant & Machinery | 1,421.75 | - | - | - |
| 5. Scooter | 17,435.85 | - | - | - |
| 6. Two wheeler | 15,138.50 | - | - | - |
| 7. Honda Activa | 43,479.00 | - | 53,685.00 | - |
| 8. Motor | 2,300.00 | |||
hi .........depriciation is a charge on fixed assets and lifo fifo methods are used for the valuation of stock (as per AS)
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