Scraped machinery

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1359 Points Posted on 25 October 2022
If a machinery is scraped just one day after purchasing it then is depreciation for 1 days charged or not ?
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On 25 October 2022 at 19:10 Report
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If machinery is scrapped shortly after purchase, you need to consider depreciation and potential impairment. Depreciation for the period it was held is generally charged. If the machinery is spoiled, impairment testing is required to write off the loss, comparing the carrying amount to its recoverable amount. While impairment testing is optional under AS, it's mandatory under Ind AS.

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4592 Points Posted on 25 October 2022

No depreciation is charged during held for sale period

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On 25 October 2022 at 21:03
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4592 Points Posted on 25 October 2022

What isbscrapped means is it spoiled or obsolete

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On 25 October 2022 at 21:27
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1359 Points Posted on 25 October 2022
Spoiled
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On 25 October 2022 at 21:39
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4592 Points Posted on 25 October 2022

Then you have to follow the impairment testing and weite of the loss. Carrying amount less accumulated depreciation less impairment charges. In AS impairment test is optional but in indas impairment reciew is mandatory. Xoming to how much depreciation needs to be charged? 1 day depreciation is enough. 

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On 25 October 2022 at 21:59

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