Query on Depreciation

 if the subsidy is given only for purchasing the machine ,than u have to deduct the subsidy from cost and provide depreciation on the resultant figure.

Dear Saket,

There are two treatments specified in AS-12 regarding this case:-

1) Credit the amount of subsidy in the asset A/c & Depreciation to be provided on Net amount.

2) Subsidy is credited in separate A/c which is amortized over the life of fixed asset by transfering the amount of subsidy to profit & loss a/c in proportion of depreciation...Neddless to say that in case Depreciation will be charged on the actual cost of Fixed asset..

 amir had hit the core....

 i think there is no query  now. Amir describe the good point and solve the query