06 December 2007
A company which follows schedule xiv rates of Companies Act for depreciation. But this company depreciates its assets upto 95% of the historical cost of the assets. There after it does not provide any depreciation in the books. whether company is correct in doing so or not?
06 December 2007
As per company law 95 per cent of cost of an asset to be depreciated over its life, the Income-Tax Act does not stipulate any condition. AS 6 ICAI requires that the historic cost of the asset less its estimated realisable value to be depreciated over its useful life. Schedule XIV of the Companies Act PROVIDES schedule of the depreciation rates to be charged by companies. SO THE COMPANY'S PRACTICEIS IN TUNE WITH THE LAW. R.V.RAO
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