If an asset is purchased and the same is not used for the fi

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Querist : Anonymous

Querist : Anonymous (Querist)

23 April 2014 If an asset is purchased and the same is not used for the financial year, should the company charge the depreciation and the reason for the same?-

ch durgaprasad

ch durgaprasad (Expert)
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23 April 2014 depreciation should be claimed from put to use of asset in the production under income tax act, but in the case of accounts you can avail depreciation from the date of purchase

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Sandeep Dharar

Sandeep Dharar (Expert)
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23 April 2014 Depreciation is only claimed if the asset is installed as per IT Act.If u have purchased the asset and put it in godown n not put it in use then no Dep.n shall b clamed on that asset.

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Querist : Anonymous

Querist : Anonymous (Querist)

23 April 2014 Hi sandeep, as per you if we are not using the asset we cant claim depreciation , then what will be the accounting treatment for the saame,

Sandeep Dharar

Sandeep Dharar (Expert)
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23 April 2014 No accounting treatment will b made for the financial year. Let us see an Example:-

U purchased on say 21st Apr. 2014 but u installed it on say 31st of May 2015 then u will make the following Entry:-

Assets Dr
To Cash/Bank
(In the amount of assets all expenses which r incurred for installing the assets will b included along with its purchase price)

And for the Fy 2015-16 u can claim Dep.n on that assets:-

Dep.n Dr
To Assets

Rupesh Jain

Rupesh Jain (Expert)
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23 April 2014 you make this assets as work in progress. due to you are not starting use this assets .
under income tax assets used during the year.
depreciation will charge on used during the year.