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Depreciation of residual value- if useful life is 0
Hello, I have a query. The assets are shown in balance sheet as residual value @ 5 %. So during the current year, No depreciation will be taken. As per companies act, 2013, useful life of assets are nil. Now, can i show assets in balance sheet as it is or not????
Replies (3)
it will be shown at residual value in balance sheet
May i written off that assets?
Mansi
For the purpose of control, it is recommended not to write off the assets. If the asset is completely written off, then control over the asset cannot be established. Hence, the ideal practice would be to write down to asset to Re.1 or Rs. 100 till it is held by the business. Once it is sold, scrapped or physically disposed off, it can be written off.
This is how many multi-nationals do their fixed asset accounting.
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