Sachin (sachinsahdev@gmail.com) (51 Points)
19 July 2014Hi Experts,
As per AS 6, what should be the amount of cost on which depreciation would be calculated on choosing WDV Methos
Say,
Cost 100000
SV 5000
Life 10 Years
In SLM : Cost will be 100000-5000 =95000 on this depreciation will be distributed 9500 in 10 years
What will happen while choosing WDV
Say rate comes 20% for 10 years
Cost will be 95000 or 100000 on which depreciation will be calculated ?
Basis or standards line, if shown, will be added advantage.
Thanks
CA. sanjeet Kumar Ojha
(Chartered Accountant)
(272 Points)
Replied 19 July 2014
As per WDV Method, Depreciation shall be caluculated on Rs 100000.
As per Sec 43(1) which deals with the Actual Cost.
Actual Cost is the cost what you have actually paid for the assets.
So, for WDV Method, You have paid Rs 100000, and hence this Rs 100000 shall be the actual cost for calculating Depreciation.
Hope Reply is satisfactory.
CAclubindia
