Straight Line Method Depreciation

327 views 4 replies
Dear Friends
How do we calculate SLM?
Asset Value 10000, Salvage 500, Net 9500, Life 3 years.
9500/3 : 3167 Depn cost per year
3167/12 : 264 Depn cost per month

This montly depn cost is same for all 12 months? Bcoz, Jan month is 30Days, 28 and 31 days for Feb & March month respectively. In this cases how do we account same depn cost for all 12 months?

Definitely it will be inaccurate for costing in Manufacturing Industry.
Replies (4)

Rs. 3,167 p.a depreciation 

Thank u so much Mr. Navern.
One more clarifications; Plant & Machinery purchased on June 2018 and started amortization for the same month onwards. After 15 months (Aug 2019) we received a notice from Customs regarding short duty valuation of particular Plant & Machinery now customs is asking to pay 75K against that FA.
Machinery Cost 1000000
Salvage Cost 50000
Net Value 950000
15 months Depreciation Cost 148,450
NBV after 15 months 851,550.
How so we add this customs Duty in the FA?
NBV after 15 months or From the date of Acquisition? From the date of Acquisition means we already closed Financial Statement, if AuG 2019 how do we calculate?

You should add 75000 to 851550 and depreciate this amount to remaining life.

Thank u so Much Manish Ji


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