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Can we claim the deprication on monthly basis

Saurabh (AM) (28 Points)

06 September 2012

Dear Sir,

As per the comapnies act 1956, can we claim the deprication on monthly basis insted of days.

Saurabh Gupta

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Srikanth M S (finalist) (88 Points)
Replied 13 September 2012

Dear Sir,

As per my opinion, There is no such clause existing, which says the depreciation shall not be charged on a monthly basis.. as far as u r compiying with the minimum required rates as prescribed in the Act there is no violation made..

However, it shall be ensured that the rate and the company policy which are to be taken by the company are in line with the basic comditions, such as, The prudence, Substance over form and Materiality (These r not the only things which are to be taken care of, these r the minimum things which are to be taken care)

The same should be in total match with the Annual rates also.. though charged on a monthly basis..

Note: This opinion is beeing given in accordance with the respective accounting standards like AS1 and 6 also..

Regards,

Srikanth.M.S