Depreciation rate less that Sch XIV rates

Dear Raman G

we have to two option to claim depreciation

Firstly as per company law i.e. 13.91%

Secondaly as actual i.e. shiftwise.

but when u have to change method , it is as per indian standard, GAAP and other compliance.

if it represnet true and fair view then u have to definete change

Dear Venkat Sir,

Rates of depreciation, as prescribed by Schedule XIV are minimum rates & a company cannot charge depreciation at a rate lower than those prescribed.

A higher rate can be charged.

So, if a company is using any asset for multiple shifts & charging the depreciation as per single shift then this calls for the auditor's qualification in the report.

As far as rectification goes - The arrears of additional depreciation shall be shown under "Prior Period Items" as required by AS - 5.

Sanjay Sir, I think there is a little misunderstanding since you have suggested the procedure for "Change of accounting Policy" as "Change of rate of Depreciation" is a "Change of Accounting Estimate" & is not a "Change of Accounting Policy" in terms of AS-5
 

Thanks for your valuable information.

A company cannot charge depreciation at a rate which is lower than those prescribed.

Rates of depreciation, as prescribed by Schedule XIV are minimum rates

A higher rate can be charged