Depreciation

Indhumathi (CA Final) (84 Points)

19 August 2011

Can depreciation can be calculated on LIFO basis?

If a partnership firm has be following FIFO basis to calculate depreciation, Can it change to LIFO basis now?

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7 Replies

valji (Accounts manager-MBA) (2150 Points)
Replied 19 August 2011

DEPRECIATION IS CHARGED ON THE ASSET PUT TO USE FOR P & M & FOR OTHER ON DATE OF PURCHASE

Sanat kumar (Chartered Accountant) (265 Points)
Replied 19 August 2011

Hi Indhumathi

Depreciation is calculated on the value of assets (as per companies Act/AS) or on the value of block of assets (as per income tax)..

LIFO/FIFO is valuation method of stock. So it is not relevant for depreciation calculation.

silvi ubal gomes (Awaiting Final Result) (82 Points)
Replied 19 August 2011

Depreciation is allowed to a prtnership as per Income Tax Act 1961 section 32 which gives the benefit from the date of acquisition and put to use.

CA Devender Chauhan (Group Financial Accountant) (1526 Points)
Replied 19 August 2011

Originally posted by : Sanat kumar
	Hi Indhumathi Depreciation is calculated on the value of assets (as per companies Act/AS) or on the value of block of assets (as per income tax).. LIFO/FIFO is valuation method of stock. So it is not relevant for depreciation calculation.

yes agree with Sanath

mounika (semi qualified chartered accountant) (981 Points)
Replied 19 August 2011

Originally posted by : Sanat kumar
	Hi Indhumathi Depreciation is calculated on the value of assets (as per companies Act/AS) or on the value of block of assets (as per income tax).. LIFO/FIFO is valuation method of stock. So it is not relevant for depreciation calculation.

agreed

Indhumathi (CA Final) (84 Points)
Replied 20 August 2011

Hi friends thanks for replying. Please calculate deprication in the follwoing case