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No Depreciation Charged?

1757 views 8 replies

hey is it ok if company doesnot charge depreciation on Plant  and machinery?reason of not charging depreciation being that plant is not in use.or is it complusory  to follow rates given under companies Act?Please resolve this query fast.

Replies (8)

As per AS-10 depreciation is charged to assets when it was ready to put to use !!!!!!!!!!!!!!!

but after being put to use if asset remains idol and wht abt reduction in the value of asset bcoz of change in technolgy or wear and tear

Depreciation has to be charged if the asset has been purchased & put on hold for more than 6 months.

Depreciation has to be charged irrespective of whether it is put in use or not.

if not in use, the asset doesnt go thro' wear & tear, agreed.

but as obsolescence cannot be avoided, providing for depreciation is prudent.

Even if the asset is not put to use, the depreciation has to be charged by the Company due to its normal wear and tear.

For all companies the rates of depreciation are given in Schedule XIV of the Companies Act, 1956 which has to be strictly followed.

I agree with JEET

thanks

Surya


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