15 October 2009
A Fixed Asset purchased at Rs.10 Lacs and a discount of Rs.1 lacs received from the Vendor. At what amount should the assets be recorded in the Books and on which amount should the depreciation be charged i.e. at Rs.9 lacs or at Rs.10 lacs?
You can claim depreciation on the above amount only.
As per AS 10 Cost of Fixed asset is calculated as under:
"The cost of an item of fixed asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any TRADE DISCOUNTS AND REBATES are deducted in arriving at the purchase price."
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