Depreciation as per Company Act 2013 for Computer Residual Value

Hello Good Morning Export,

 

I have a Query on Depreciation as per Company Act, 2013 for Pvt Ltd Company.

which below Calculation A) or B) is Correct on WDV method of Depreciation as per company Act 2013. 

if A pvt ltd Company purchase Computer at 100000 on 01.04.2020

Dep as on 31.03.2021         A)   =100000  - 5000  (5000 is residual Value)

                                                   = 95000

                                                   = 95000X63.16/100

        Dep as on 31.03.2021       = 60002

OR

                                           B)    =100000X63.16/100

       Dep as on 31.03.2021        =  63160

 

 

 

Replies (11)
Quick Summary
This discussion clarifies the correct method for calculating depreciation on computers under the Companies Act, 2013, specifically using the Written Down Value (WDV) method. It addresses confusion regarding whether to deduct the residual value before or after applying the depreciation rate. The consensus points towards applying the depreciation rate to the asset's value directly, without pre-deducting residual value in the WDV calculation, contrasting it with the Straight-Line Method (SLM).

These are old values , upload latest one.

My question is in WDN method of latest Company Act, 2013.

If asset value is 1000000 then we calculate depreciation on 100000 or 95000 ?

Second method is correct I e. 63160

I think WDV formula is 1-(residual value/cost)^1/n. So only straight line method deducts scrap value. 

Use calculator online using three years life

https://indiantaxstudy.com/calculate-depreciation-online-slm-wdv/

@ Rashmi my laptop is working from last 10 years succefully with new HD. How to evaluate it? 

Thank you so much @ Rashmi Madam

Thank you so much @ Yasaswi Gomes

Hi can someone please explain me this:

I was calculating DTA/DTL on depreciation from SLM & WDV. The formula in the text book is saying

SLM-WDM=Temporary difference

Then (Temporary difference* Tax rate*-1) why -1? because of this -1, all positive temporary differences are becoming DTL's and all negative temporary differences are becoming DTA's

Welcome🤗🤗🤗

For my question I'm changing it to WDM-SLM = TEMPORARY DIFFERENCE. THAT SHOULD SORT OUT -1 ISSUE

Particulars For Book For Tax Difference (DTA)/DTL @ 30%
Income 1000 800 200  
Opening Balance of (DTA)/DTL – – – –
Depreciation 100 200 100 30
Sales Tax payable 50 0 (50) (15)
Leave encashment 200 100 (100) (30)
Closing balance of (DTA)/DTL – – – (15)

 

This example is also a wrong example. Carrying amount - Tax base = DTA/DTL

Tadaah. People are manipulating taxes and misguiding students through AS accountants. In IFRS and INDAS, strict adherence in the financial reports that they cannot measure anything like WDV-SLM but it must be like SLM-WDV or else a penalty will be imposed on the CA. SO better make real examples and post them here, or else be prepared for the repercussions. 

So DTA/DTL= (Temporary difference*Tax rate*-1)

Online Criminals!!

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