Depreciation on vehicle

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A vehicle was sold this year which was purchased in 2026 no depreciation was charged on that in books till date so should depreciation be charged on that vehicle now for the purpose of calculating profit and loss. what should be the treatment in books. thanks
Replies (9)
Any reason why depreciation was not charged for past 15 years. you need to calculate depreciation to arrive at the book value of vehicle in order to ascertain loss or profit..
It was purchased in *2016 now if we charge depreciation should we debit whole depreciation till date in p&l a/c or in capital a/c
If depreciation is not charged the charge lapses for those particular years.
it was not clear from your initial query if vehicle was purchased for personal purpose. if you had not shown the asset in your business then no need to book profit.
however if it was used for business then depreciation for 2021-22 need to be debited to revenue. and profit loss to be calculated
It was for business purpose but as according to your answer if we debit the depreciation for 2021-22 only then in that case how to calculate the profit or loss because we won't arrive at exact book value
Ideally depreciation should have been calculated from 2016 onwards. But since you have not shown depreciation till date, your profit would have been inflated in the earlier years and the WDV of assets will be the same as cost. Now considering the 'block of assets' method you will need to calculate the depreciation accordingly. i.e. if you had only 1 vehicle in the block which is now sold then there will be STCL/STCG depending on the sale value and WDV...if you had 2 vehicles in the block out of which 1 is sold now you will need to calculate depreciation if the WDV remains positive after considering the sale price.
There is only one vehicle purchased in 180000/- sold in 110000/- now
1.what will be and how we will calculate WDV in the above mentioned situation as in books 180000 is showing in current year.
2. should we charge depreciation for 5 year since 2016 in current year and debit the whole amount in p&l along with profit or loss.
anyone please calculate it.thanks
Opening WDV = 180000
Sale value = 110000
Closing WDV of block = 70000
but since there is 0 assets left in the block, it will be a Short term capital loss of 70000.
No depreciation will be charged.
I think depreciation for 2021-22 needs to be provided to arrive at wdv and loss thereon
Thanks for reply that short term capital loss will be debited in p&l acc or in capital account.


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