Depreciation

Dear friend,

if we are following SLM method, then as per AS-6, we should amortise the 95% of the cost of the asset over its useful life. the loss or profit if any arising on the disposal of the asset at the end of its useful life should be taken to P&L.

However, there is provision in Income tax Act for Power sector companies to follow 10% SLM and write off entire cost. in this case the WDV in the last year becomes zero.