30 June 2018
Company had taken carrying amount as on 31.03.2015 as deemed cost for calculating depreciation as per Ind AS provision.On what amount depreciation is to be calculated?
Treatment given by company in it's books of accounts is as follows: They had applied SLM method and deduct accumulated depreciation from purchase cost.Whether this treatment is correct?
Our view is that accumulated depreciation from 01.04.2015 is to be deducted from carrying cost.
01 July 2018
The treatment is correct. Amount of accumulated depreciation will be deducted from the purchase cost and the depreciation will have to be calculated under SLM on the purchase cost of the asset and not on the reduced value.
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