18 May 2009
My company follows depreciation as per companies act from starting which is low rates.But now it wants to follow depreciation as per IT act.If company changes to it. Will it be done with retrospective effect or not?If yes then the most of the assets will show a low balaces in Balance sheet. even some assets shows negative balances.so what can I do in this situation.Plz suggest me? thaqs in advance.
18 May 2009
Rates given in companies act are minimum rates to be charged. If company wants to use higher rates then its ok. It will be prospective effect and not retrospective effect. one more thing if asset is fully depreciated, there will be no further depreciation on that asset. So no negative value.
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