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Depriciation

Abhishek Mehta (CA Final Student) (73 Points)

23 October 2007

Dear All,

Company is following WDV method but it is applying SLM rates. Now during audit ,I found out this. Now what should I do in current year.Should I give retrospective effect or I apply right rates in current year.But If I apply right rates,Co. has to face loss.

Please help.

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7 Replies

CA. Dashrath Maheshwari (TaXpert) (15090 Points)
Replied 23 October 2007

You have to calculate from the start. and to give a note in the notes on accounts.

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 23 October 2007

The contiuiing mistake has to be rectified .......recalculate from the beginih and pass rectification entry in the current year .......qualify the audit report

saran kumar (student) (145 Points)
Replied 31 October 2007

need to book a rectification of entry in this year...... even company result s n losses ..... and qualify the report

Nallusamy (Accountant) (32 Points)
Replied 01 November 2007

Depreciation we are calculating two methods 1. Companies Act 2. IT Act. why are we (copany) are calculating two ways?

ashok (CA) (112 Points)
Replied 17 November 2007

Is there a need to qualfiy the audit report, for just changing the method of depreciation . That too following the accounting standard and disclosing in the notes.

CA AYYAPPA (Chartered Accountant) (272 Points)
Replied 22 November 2007

The difference shall be treated as Prior period Item. Shall be disclosed seperately in the profit and loss account.

ashish (C.A final student) (57 Points)
Replied 25 November 2007

u have to follow W.D.V. rates with the retrospective effect.any profit or loss arising from such, will be adjusted in P/L a/c of current year.again i m repeating change can only made through retrospective effect.