Depreciation for accounting purposes

Hey all,

I am modifying my query as below:

When asset is purchased--- dep for full yr is provided irrespective of date of acquisition

When asset is sold--- no dep is provided..

Is this approach correct??

Thanks in advance....pls do reply!!

No answers till now ?????

Pls can anyone help!!!

hi deepak

as per the info given by u...it is an accounting policy being followed by NGO. In case of income tax the depreciation will hav to be strictly calculated as per the provisions of Sec 32 of the act. In case of Cos. Act, it has been provided that depreciation will have to be provided proportionately on the basis of the number of days for which the asset has been in use both in the year of purchase and the year of sale. But practically in some organisations this is not followed. The place where i am auditing also follows the same procedure as told by you. In strict sense it is wrong but in practical situations it is quite prevalent. There is nothing wrong in following this policy as long as it is being followed consistently over the years.

Thanks fr d reply Shini....

But is there any reason for following the practice listed by you???

well even i hav not come across a logical reason for doing so....lets hope anyone on cci may provide us with a reason.