Depreciation on idle assets
This query is : Resolved
04 June 2012
Can depreciation under companies act be claimed on assets being idle (since no production activity took place during the year)?
Pls reply ASAP
Pls reply ASAP
04 June 2012
yes apply at the prescribed rate
04 June 2012
Dear user,
As per Accounting Standard 6-
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.
Hence, Depreciation is required to be charged even on idle assets.Companies Act no where requires to charge depreciation except u/s 205 if you want to declare dividend.
As per Accounting Standard 6-
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.
Hence, Depreciation is required to be charged even on idle assets.Companies Act no where requires to charge depreciation except u/s 205 if you want to declare dividend.
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