Costing Depreciation
This query is : Resolved
19 December 2010
A machine was bought @ Rs. 5,00,000 in the year 2000. The depreciation rate is 25% as per book of accounts. It has estimated life of 20 years and has no salvage value. The market price of new machine is Rs. 9,00,000 in the year 2010.
What is the procedure for calculating in replacement method of depreciation?
What is the procedure for calculating in replacement method of depreciation?
19 December 2010
Deprectaion under costing comes under factory overhead. Overhead is charges as per machinary hour or life of the machinary. You can take the deprectaion as per the life of the machinary. However , you have to show the difference while reconciling the profi as per books and cost accounting.
Replacement method should not be adopted for cost accounting purpose.
Replacement method should not be adopted for cost accounting purpose.
Message likes :
1 times
20 December 2010
Mr. Sankara ,
If you Looking for Overhead Allocation then Surely Replacement method Cannot be the Apt Base.
But Theoretically If u want To know , Kindly Note!
1)Take Market Value and Identify the WDV as would have been on this Value in the Begining of the year.
2) Consider Depreciation on this WDV now.
Besides This what must be Kept in mind is that Allocation should be Done after Considering Machine Hour Rate , Since Replacement Cost Depreciation can provide Weird Results Also.
Regards
Ankit Gulgulia
If you Looking for Overhead Allocation then Surely Replacement method Cannot be the Apt Base.
But Theoretically If u want To know , Kindly Note!
1)Take Market Value and Identify the WDV as would have been on this Value in the Begining of the year.
2) Consider Depreciation on this WDV now.
Besides This what must be Kept in mind is that Allocation should be Done after Considering Machine Hour Rate , Since Replacement Cost Depreciation can provide Weird Results Also.
Regards
Ankit Gulgulia
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- ITC temporary reversal and reclaim
- TDS U/S. 194NF
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- Import license renewal
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
