Depreciation is over charged in previous yeras due to practice of charging depreciation on the opening block of assets by straight line method irrespective of taking into question that there might be some assets in the block on which 100% depreciation is already charged. Now while preparing the complete chart it was found that there were a number of assets whose W.D.V. is negative due to the fact that depreciation continued to be charged even when the W.D.V. became zero because purchase value of those assets still persist in gross block. What should be the remedy now, as the error is caught of very significant amount.
What would be its effect on MAT and other Accounts book of the company. And whether the Income Tax department will raise any issue on this.
CAclubindia
