Depreciation

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CA RITU R AGARWAL

Practising Chartered Accountant

35 Points Joined August 2009

If there is a Fixed Asset, whose depreciated value in the Balance Sheet as on 01/04/2009 stands at an amount below 5000/-, and there are no additions during the Year, can we w/off whole 100% value as depreciation even when the asset is not disposed off and is being used in the business?

If we cannot w/off we will have to still depreciate it at its normal rate,even when the amount is as low as in hundreds or so??????

Schedule XIV only mentions regarding Cost of Asset being less than 5000/-

Kindly advice on the matter!!!

Replies (5)

Sharad Saini

Student

286 Points Joined May 2010

hi,

it should not be done in my opinion.....

CA RITU R AGARWAL

Practising Chartered Accountant

35 Points Joined August 2009

Thanks Sharad for replying.,

But you mean to say that if there is an asset at a value (say) Rs. 100/-, (say) depreciation rate is 10%,

then I should claim only Rs.10/- as depreciation and carry forward the balance of Rs 90/-????

Kumar

Article

922 Points Joined January 2009

Ritu

An asset whose original purchase price is less than 5000/- has to bewritten off 100% in the year of purchase, and not the assets whose wdv is below 5000/-,

Again an assets whose wdv is 95% of the cost should not be written down any further.

In you case as the wdv is 5000 so it should be depreciated at the depreciation rate and not @ 100%.

Again in case of Rs. 100 if the same is of an asset whose original value was above 5000 the it should not be depreciated any further. as 5% of 5000 is Rs. 250/-.

Hope u got it.