Does Depreciation generate funds for replacement of Assets... ??????
Does Depreciation generate funds for replacement of Assets ?
satish r (student) (91 Points)
25 June 2010
2 Replies
Siddarth R Sunder Ram
(Finance Professional)
(230 Points)
Replied 25 June 2010
Yes. When you charge depreciation, you are essentially setting aside a part of the profits every year during the lifetime of the existing asset, which means that this portion of the profits is retained and accumulated without being distributed to the shareholders as dividend. Thus at the end of useful life of the existing asset, you'll have some funds to replace the asset.
Mohammad Asif
(chartered accountant)
(191 Points)
Replied 02 November 2010
yes when we make provision for depreciation a certain amount is accumulated to be used at the time of purchase of new assets
Recent Topics
- FORM 10 IEA IN Revised return
- ITC Eligibility on GTA
- Top Highest Tax-Paying Celebrities: FY 2023-24
- Misplace society Bye law
- Submit ommited invoice of previous year
- Need your valueble insight
- GSTR-9 Invoices
- Agricultural Business Loss
- Reporting in gstr9 of ITC of Previous year reverse
- Tax on Reimbursement of House Rent
Related Threads
CAclubindia
