28 June 2012
suppose a branch purchased a car for Rs. 1000000.00 depreciation for 10 yrs on SLM basis and after using the same for 1 yr transfered it to next branch and the second branch booked it for Rs 900000.00 and depreciate it at Rs. 100000.00.I have confusion that if booked for Rs.900000.00 then depreciation should be Rs. 90000.00.Do my contention is correct or department is doing correctly?
28 June 2012
Mr. Anup, Your contention is not reight as the depreciation is provided over remaining useful life of the asset. The remaining useful life is 9 years only and accordingly depreciation for 1 year will be Rs.90000/9 = Rs.100000PA.
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