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Depreciation

Ashish Sharma (Service) (1028 Points)

21 March 2010

Hi,

We have purchase three computer and get a printer and UPS free of cost with them and the get delivery challan of ups and printer which mention free of cost not for sale. can we claim depreciation on ups and computer and as they are physically in the office but how can i show it in my books.

pls. help?

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3 Replies

Anshika ( CA -Industry- Sr.Accounts Officier) (141 Points)
Replied 22 March 2010

See Ashish , in coming IFRS principles ---- nothing can be termesd as free , you have to assign some value to it - only then you can claim depreciation on it . Moreover they can be physically verified

First assign it some value by taking the invoice from vendor

Ask ur vendor to show , on the face of invoice

Cost of computers xxxxx ( with in built cost of printer and UPS

less Discount - cost of printer xxxx

less Discount -cost of UPS xxx

Selling Price yyyyyy

now segregrate the selling price firstly in printer and ups ( cost mention above )

and divide the rest amount (selling price - printer cost - ups ) by 3 - -----to get the value of three computers

Note ; First check the company policy whether to capitalise the UPs or not else expensed it off

Pls clarify in case , u need more help

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Shubhankar Limaye (B.Com.) (174 Points)
Replied 26 March 2010

You may charge depreciation on cost of acquisition (i.e. zero)!

Deepika Agarwal (CA practice) (93 Points)
Replied 26 March 2010

UPS and printer are also a part of computer. so u can claim depreciation on cost of acquistion what u pay for acquiring computer system. all the expenses what u expand for acquiring and installing is the capital expenditure.