CA rahul (BCOM(H) ACA) (725 Points)
12 August 2011a company purchased asset costing rs 50000 on 15 jan 2001 and incurred installation expense rs 5000 on rs 20 jan 2011 .as per company act dep is charged from the date asset is acquired and not from the date asset is put to use .my query is regarding amount on which dep is charged either on rs 50000 from 15 jan or rs 55000 from 15 jan
CA Saiyum khan
(Practicing CA)
(685 Points)
Replied 12 August 2011
DEpreciation will be charged on Rs.55000 from 20th Jan as asset was ready to use only after installation.
valji
(Accounts manager-MBA)
(2150 Points)
Replied 12 August 2011
agree with above depreciation will be charged on asset on put to use i.e installation date
Shipra Gupta
( Final n Article Assistant)
(70 Points)
Replied 16 August 2011
CA Sachin Rastogi
(Audit/IFRS Manager)
(338 Points)
Replied 16 August 2011
The relevant date for charging depreciation is the date on which the asset is ready for use. Put to use date is irrelevant for depreciation purposes. In the above case, the asset cannot work unless it is installed. Thus, 20 Jan is the date on which the asset is ready for use and the relevant depreciable amount is INR 55,000.
CAclubindia
