21 June 2012
Is it compulsory to provide depreciation on assets. One of our company does not have any revenue/sales during 2011-12. So should we provide depreciation on building on we can defer that for next year and provide depreciation for two years in next years.
21 June 2012
The compnaies act does not require to provide depreciation on assets except when the company wants to declare dividend. Hence, only section 205 of companies act requires to provide depreciation on fixed assets if the companies wants to declare the dividend. However, depreciation is to be provded as per AS-6 even if the assest are not actually used.it is provided for efflux of time also. In Income tax, it is mandatory to provide depreciation.
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