Retrospective effect of Depreciation
This query is : Resolved
05 November 2009
If at the end of the current year the method of depreciation is changed and the change has a retrospective effect, will this retrospective effect apply to the sales and purchases made during the year and/or during the earlier years?
For example: An asset purchased in 2005. Additions made in 2006, 2007, and current year. During the year, part of the asset is sold. As on the last day of the year, the depreciation changes from SLM to WDV. Would you recalculate the depreciation of the asset sold till the date of it's sale and adjust it?
For example: An asset purchased in 2005. Additions made in 2006, 2007, and current year. During the year, part of the asset is sold. As on the last day of the year, the depreciation changes from SLM to WDV. Would you recalculate the depreciation of the asset sold till the date of it's sale and adjust it?
CA.Ramkrishna
(Expert)
07 November 2009
yes
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