Depreciation calculation

608 views 3 replies
   
  The company made an error in depreciation calculation during earlier financial periods.
  Due to this the company's net block is undervalued by Rs 1 cr.
   
  How could we rectify this error and disclose in financials
Option A Considering this as prior period item in the financials
Option B Revaluation of asset and bringing it to current market value.
   
   

 

Replies (3)

Dear Saradhi,

Correct the amount in current FY & give effect to retained earning!

 

Regards,

Rita Paryani

Originally posted by : saradhi









 

 



 

The company made an error in depreciation calculation during earlier financial periods.



 

Due to this the company's net block is undervalued by Rs 1 cr.



 

 



 

How could we rectify this error and disclose in financials



Option A

Considering this as prior period item in the financials



Option B

Revaluation of asset and bringing it to current market value.



 the asset can be revalued after passing resolution in meeting and bring it to current

market value & create a revaluation reserve of the same amount at asset has been increased



 



 

 




 


Since it is an error - it has to be with option A!

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