The Companies Act, 2013 requires companies to compute the depreciation in accordance with the Schedule II to the Companies Act which provides useful lives to compute the depreciation.
When we follow the method of computation of depreciation pronounced in Sch II of Companies Act under WDV method, the residual value is not matching with Scrap value fixed initially.
Small illustration has been provided below:
| Cost of the asset | 100000 | ||||||||||||||||||||||||
| Life of the asset | 5 years | ||||||||||||||||||||||||
| Date put to use | 1st July 2015 | ||||||||||||||||||||||||
| Method of Depreciation | Written Down Value method | ||||||||||||||||||||||||
| Scrap value | 500 | ||||||||||||||||||||||||
| Rate of Depreciation | 65.34% |
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Kindly explain how to deal with the difference amount of Rs.115 i.e. 615-500 With regards |
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CAclubindia
