Hiren Bhandari (CA Practise) (93 Points)
03 July 2012As per AS-11 change in foreign exchange in long-term monetry assets (fixed assets, long term liabilities) in cost of fixed assets at the year end.
My ques is this that whether dep has to provide on that addition (due to adding/deduction for exchange difference)
PLZ its imp.
Ashish
(CA)
(166 Points)
Replied 03 July 2012
You can provide depreciation as per Companies Act but for Income Tax you have to follow Sec 43A of Income Tax act and SC decision in Arvind Mills Case.
Sneha dagli
(étudiante)
(197 Points)
Replied 03 July 2012
As per Income tax act you can provide depriciation on escalation due to exchange rate fluctuation as it would be capitalised and enter into block of assets u/s 43A only when actual payment is made.
Hiren Bhandari
(CA Practise)
(93 Points)
Replied 03 July 2012
i agree wid all. But my ques is whether on 31st march, dep is to be charged or not. If yes than at what rate and for what period.
Sneha dagli
(étudiante)
(197 Points)
Replied 03 July 2012
tx @ sankalp and if payment is made before 31st march then you can charge depriciation.dep will be provided on opening wdv+escalation in cost on Exchange rate fluctuation
CA Sankalp Patwa
(CA)
(193 Points)
Replied 04 July 2012
Yes Sneha you can provide depreciation if payment is made before year ending.
If payment is made after balance sheet date but before date of auditor's report then please check "subsequent events requiring adjustments" in AS 4.
CA Sankalp Patwa
(CA)
(193 Points)
Replied 04 July 2012
And for Income tax purpose your opinion is very true depreciation will be available only when actual payment is made.
CAclubindia
