In Last financial year i.e for 2013-14, my client has used the old depreciation rates and complied with the rates as prescribe in Companies Act.
But in current year i.e F.Y 14-15, they are not compiled with new rates as per Companies Act,2013. Depreciation is charged as per old rates only i.e on SLM basis till September 2014. System used by them is unable to give retrospective effect.
So how to find the correct depreciation? And what would be the accounting treatment for the same?
22 December 2014
No retrospective effect or on opening block carrying amount as on 01-04-2014 has to be depreciated over the remaining useful life. Do as per Transitional provision para of the link provided.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
05 January 2015
Dear Sir,
If we go for transitional provision, we will not get salvage value at end of the new useful life,
So should we reduce salvage value from the carrying amount as on 01-04-2014 and calculate depreciation on that reduced amount as per new useful life?