Can anyone let me know the following query on depriciation:
One of a company is not showing Depriciation for last 3 years whereas it has a fixed asset base of a value of ~ INR 20 lacs.
Although as per Companies Act, Section 205 makes it compulsory to charge depriciation before declaring dividend but as company doesnt declare dividend so this section is not applicable.
1.Is that possible to not charge depriciation on F.A.
29 November 2007
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SEC 205 SAYS NO DIVEDEND SHALL BE DECLARED OR PAID EXCEPT OUT OF PROFITES ...ARRIVED AT AFTER PROVIDING DEPRECIATION....
205 (c) says only central govt. may permit for declaring... dividend without providing depreciation.
The general priciples of accountancy say that 1. if capital work is in progress and 2.if an asset is not commissioned , no dep. needs to be charged. R.V.RAO
29 November 2007
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