Dear Friends
Suppose that one company is having a policy of providing depreciation at minimum rates prescribed in Sch XIV of the companies Act on WDV basis.
But in many years, for many assets, excess depreciation has been provided because the rate applied was 18.10% instead of 13.91%. Also for some assets, the rate applied was 13.91% instead of 18.10%.
He also applied arbitrarily depreciation at half rate and full rate depending on whether asset was put to use for 180 days or more (Income tax Act treatment).
Now how to rectify these mistakes, what disclosures to be made in the financials. Will it be a correct treatment to write back to the P&L account or to provide arrears of depreciation?
Please share your valuable views
CAclubindia
