06 December 2010
Are printers and UPS used alongwith computers to be classified as COMPUTERS for the purpose of depreciation under IT Act or they are to be classified under Plant and Machinery?
Also can for the purpose of accounts, depreciation charged in the books of accounts be greater than the rates provided in Companies Act?
06 December 2010
Printers and UPS are to be shown as fixed assets under "COMPUTER". Depreciation to be charges in accordance with rates given in companies act. You can charge depreciation at rates higher than provided in companies act.
06 December 2010
Mr. Sanjay,thank you very much for your immediate response I am a paid assistant and my colleague argues that printers and ups should be treated under plant and machinery. the higher rate of depreciation 60% is not applicable to printers and ups
06 December 2010
computers to be classified under Plant and Machinery for the purpose of depreciation under IT Act
for the purpose of accounts, depreciation charged in the books of accounts can be greater than the rates provided in Companies Act, as rate provided in CO's act are minimum rate at which depreciation should be provided.
06 December 2010
It is stated that Schedule XIV clearly states that a company should disclose depreciation rates if they are different from the principal rates specified in the Schedule. On this basis, it is suggested that a company can charge depreciation at rates which are lower or higher than those specified in Schedule XIV.
It may be clarified that the rates as contained in Schedule XIV should be viewed as the minimum rates, and, therefore, a company shall not be permitted to charge depreciation at rates lower than those specified in the Schedule in relation to assets purchased after the date of applicability of the Schedule. However, if on the basis of a bona fide technological evaluation, higher rates of depreciation are justified, they may be provided with proper disclosure by way of a note forming part of annual account.
06 December 2010
Further Rate of Depreciation on UPS & Printers as per IT act is 60%.(i.e. Rate of Depreciation on Computers) and as per companies Act is 40%.
CAclubindia
