Depreciation in companies act

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tarun yadav

Manager

32 Points Joined June 2012

Hi...Experts...

I am working with FCi as manager accounts...while preparing assets schedule for the first time..i have came across the below queries...and seek your kind guidance for the same.

1. should i charge depreciation on the assest sold in current F.Y. upto the month of sales ?

2. How should i charge depreciation on the assets which have been installed after 15th of a month. ex: for the asset installed on 31st March 2012.

Thanks and Regards

Tarun Yadav

8690495764

Replies (2)

Guest

As per Schedule XIV of Companies Act, 1956 the company can calculate the depreciation by using either Straight Line Method or Written Down Value Method. The rate to calculate depreciation is also specified in Schedule XIV. If any addition has been made to any asset during the financial year, depreciation on such an asset will be calculated on pro-rata basis from the date of such addition or upto the date on which such asset has been sold.

CA Ganesh Agarwala

Audit Senior Manager

239 Points Joined November 2011

dear tarun,

depreciation is systematic charge on the value of the asset though out its useful life. so you need to charge depreciation for part period you are refering to. and if you are a company then such rates shouldnot be less than the rates provieded in the companies act.

cheers

ganesh agarwala