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depreciated assets below 5000

shweta jain (Assisstant Audit Manager) (124 Points)

27 April 2009

if the opening balance of any fixed asset is below rs. 5000 can it be written off in that particular year??

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7 Replies

Milan Somani (CA) (1456 Points)
Replied 27 April 2009

WDV whose value is less than or equal to 5000 cannot be charged off fully unless it is impaired or disposed off.

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Vinay (service) (36 Points)
Replied 27 April 2009

Make an accounting policy and disclose in the notes to the preparation of the financial statements that any depreciable asset less than Rs 5000 will be written off.

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 28 April 2009

Vinay is right, it decide by your adopted accouting policy. There is no compultion but in general practise it applies.

V P Narasimhan (Accounts Manager) (791 Points)
Replied 28 April 2009

Book value can be retained as 1 rupee and the balance c an be w/off subject to management's approval for the values < 5000.For example if Pager has been treated as asset earlier in the books now think about the fate of that item, Its an outdated item. likewise it can be done on case to case basis

Kaustuv (Practicing CA) (1778 Points)
Replied 30 April 2009

as per Sc. XIV of the Companies Act, assets whose actual cost does not exceed Rs. 5000 has to be depreciated @ 100%. So, it is the gross block of the asset, not the WDV figure. So, if the WDV at the beginning of the year falls below Rs. 5000 then also, it has to be provided at a minimum of the rate prescribed in Sch. XIV, not fully.

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Sandip (Assistant Manager) (21 Points)
Replied 09 July 2010

As per schedule XIV of companies act, the assets costing below Rs. 5000 shall be depreciated @ 100%. In case the assets are purchased during the month of March of any of the financial year. Whether the WDV of such assets will be carried fowards in the next year or will be written off 100% in the same year?