Companies act

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Querist : Anonymous

Querist : Anonymous (Querist)

30 January 2013 Sir,
(1)for the purpose of computation of depreciation under companies act, should we take the date of purchase of asset or the date asset was put to use?
(2)Is computation of Deferred tax asset/ liability required in case of a newly established private company,which has not started its operation except for a few expense and thus having a debit in P&l?
(3)is depreciation to be considered in case the company has not started its operation?
plz reply to my queries....

CA Harish Suwalka

CA Harish Suwalka (Expert)

30 January 2013 1. date asset put to use will be used
2. yes as-22 applies
3. NO..

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Querist : Anonymous

Querist : Anonymous (Querist)

31 January 2013 Thank you sir for your reply :-)

but i have one more doubt.

As per Accounting standard 6- Depreciation accounting- Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, "effluxion of time" or obsolescence through technology and market changes.

1. So cant depreciation be computed on the concept of obsolescence arising out of passage of time or technology change though the asset was not used? still would you say that depreciation is to be computed on the basis of put to use? if so, why?

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