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Depreciation

AS 710 views 1 replies

Dear friend ,

  let me know about Depreciation adjustment of a Company .

Our Company having maned XYZ Pvt Ltd. where Balance Sheet is signed in that name, but having TWO Unit one is Hotel Business(Existing Busines)   & anather is Steel Plant , which is under construction . Depreciation of hotel business to be charged to P/L Accounts but my doubt is how deprecition of some Machinary like JCB Earth Mover of  steel plant project is accounts for.

 

Whether propotionate Dep'n of Steel Plant project charged to  PRE Operative exp  or indivisual B/S to be made and dep'n of Steel Plant charge to PRE opetative Exp then Consolidiate both the B/S into One.

 

Replies (1)

Shouldn't we capitalize this amount of depriciation in cost of steel plant (asset) ? Refer para 10.1 with 9.2 Of AS-10

This is a specific Overhead specially for construction of steel plant therefore in my opinion it should be capitalized

 

JCB Earth mover

 To depriciation

 

Depriciation

To CWIP

 

CWIP

To fixed asset

 

 

 


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