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Depreciation calculation

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SAJMON RAJAMANI

MBA

22 Points Posted on 28 February 2014

Hi,

I'm having a business scenario, where the head office of company is located in US, one of their subsidiary is operating in India, now as per HO FY, it starts from Jan1 to Dec 31, in order to submit financial reports by HO, they need to pass depreciation entries in subsidiaries (i.e.,in India) by end of Dec 31. Since, indian accounting standard does not allow to calculate the depreciation based on US FY, how do we make entry in Indian office, books of accounts. Please help me out with your expertize.

Sajmon Rajamani

Replies (1)

CA Sourabh Jain

Practicing Chartered Accountant

48 Points Posted on 28 February 2014

as per indian accounting standard the indian branch should book their entries of depreciation in the month of march only, and the HO in US should prepare their book as per US law & charge depreciation in the month of december only.

so therefore the company should keep 2 set of books of an indian branch, 1st set of books should be kept as per US law & another set of books should keep as per Indian law.