Depreciation Calculation

FIRST OF ALL YOU SHOULD CALCULATE DEPRECIATION AS PER WDV & SL SEPERATELY FROM  THE STARTING YEAR. THERE AFTER CALCULATE DIFFERENCE IF DEPRECIATION IS MORE IN STRAIGHT LINE THEN DEPRECIATION SHOULD BE DEBITED TO PL IF IT IS LESS IT SHOULD BE CREDITED TO PL.

ABHASH

Tnks Abhash

As per AS-6 issued by ICAI, Change in method of depreciation has to be given retrospective effect. Therefore, calculate depreciation from both the methods from the beggining of the year of purchase & treat difference in dep amount accordingly. I.e. If Dep as per SLM > Dep as per WDV, write off excess dep in same F.Y. along with current year depreciation as per SLM.

Please note that change in method of dep is permitted only if required by any other AS or legal requirement or for better presentation of financial statements.

       And it should also be disclosed in books of accounts as per AS 5...right sir??

 Right.

It must be disclosed as it is a chnage in accounting policy.

further, in notes to accounts, auditor shall quantify the effect of the change in method of dep

in the case of change in depriciation method we may take effect from frist year with retrospected effect and the deff. is set off in the p/l a/c in the year in which method change

Right Pranjal.

The effect of changes in accounting policy should be shown in the financial statement.

Mr. Mittal is right.