Depreciation calculation in leap year

Others 2542 views 3 replies

Friends

Please help me in this situation....
As Year 2011-12 days are 366 and according to this Dep will be calculated as  amount*rate*days used/366 in addition n deduction...
but as in year there is no addition no deduction is fixed assets on that which is correct for calculating...

1.opening wdv*Rate/100     or    
2.opening wdv*Rate/100*366/365

second one thought is commonly used in Bank int.
same like machine is used one extra day so please advise me which one is correct according to Co.Act. Provisions.
thanks in advance

Replies (3)

got ur doubt cleared with so me of my frnds, no need to calculate no.of days if u provide dep for whole year even its leap year ... only if thre is any any sale of machinary then we have to consider no.of days

i.e wdv*dep rate                            ---- for whole year

    wdv*dep rate* no.of days / 366 --- when there is a sale in middle of year

hey as in my opinion......as for as bank interest calculation is based on rupee value depreciation na... where as machinery cant be converted readily into cash or benifit from that asset which wil be converted into stock does not be readily converted into cash..

and im not sure of my opinion whether upto what extent correct.

 

Thanks Miss.

For your advice.

My bank interest funda is  in leap year banks give us 366days interest  not for 365 days . But real Q is that Deprication rate in Co. Act suppose 13.91%  is for whole year whether 365/366days    OR for 365 days given??
I want to know what usually practicing CA  follow?

so little doubt.


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