what is provision for depreciation????? what is the deifference between provision for depreciation and depreciation??? please tell me in simple worlds........i m soo much confused between both the terms
Sreeniketh Angara
(B. Com CA PCC CS Executive)
(699 Points)
Replied 28 June 2012
Provision for Depreciation is a Liability. We provide Depreciation and without actually lessing the value from the Gross Block in the balance sheet, we show it under the Current Liabilities & Provisions. While Depreciation is expensed off and is lessed from the Gross Block in the Balance Sheet.
Harshal Fifadra
(Chartered Accountant)
(1489 Points)
Replied 28 June 2012
Dear Akash
Visit the following link : https://www.svtuition.org/2011/05/provision-for-depreciation.html
Ok ....
*RENU SINGH *
(✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ )
(21627 Points)
Replied 29 June 2012
balance sheet is all about balancing of both sides assets and lia.
and dep is normal wear and tear in the FA due to the time and other factors.
So we have to gradually decrease it so that it won't cause a burden at the time of disposing of fixed assets.
So it;s shows as assets - depriciation.
On the other hand ...Depriciation is mandatory. So we always maintain a provision for it ..
so whatever the amount should be put in depriciation is also put in the provision for dep a/c
so that assets n lia are properly balanced.
MD FATIN MOHD. HUSAIN NIZAMI
(Accounts Assistant)
(60 Points)
Replied 29 June 2012
Miss Renu is slightly mistaken about the balancing of Assets & Liabs here. If Depreciation is deducted from the value of assets then it is no longer required to mantain a provision for such amount. Infact depreciation will be charged to P& L A/c and thus the profit will be accurately computed to depict a true and fair state of affairs.
pravin singh
(article)
(60 Points)
Replied 29 June 2012
Sreeniketh Angara
(B. Com CA PCC CS Executive)
(699 Points)
Replied 29 June 2012
In Reply to Pravin Singh......
Petty Cash Account is essentialy an asset and expenses out of the same should be shown as a reduction of cash. So it is hitting our fundamentals if Petty cash is being shown as anything but an asset. Please correct the same.
Hope this clears.
God Bless
Sreeniketh
pravin singh
(article)
(60 Points)
Replied 29 June 2012
to Sreeniketh,
If a company is paying salary in cash above rs 5000 and maintaining voucher .My query is revenue stamp is required .
And If any payment is made in cash from cash in hand above rs 5000.Is revenue stamp required
Sreeniketh Angara
(B. Com CA PCC CS Executive)
(699 Points)
Replied 29 June 2012
Hi Pravin,
Ideally for all cash transactions Revenue stamp is required. But due to many constraints in obtaining the stamps, its now not in use. However since its salary above 5000, please do affix revenue stamp.
Hope this clears,
God Bless
Sreeniketh
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