26 December 2024
The Companies Act 2013 assigns a useful life of 8 years to these types of plants when calculating depreciation using the Written Down Value (WDV) method. Depreciation Rate = 1 - (Salvage Value / Original Cost)^(1/Useful Life) In this case, it's assumed that the salvage value is zero (or negligible). So the formula simplifies to: Depreciation Rate = 1 - (0)^(1/8) = 1 - 0.8812 = 0.1188 or 11.88% (approximately)
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