One of my client didnot charge depreciation from years 2010- 31/3/2014 in P&L account, but has just shown the carrying amount and accumulated depreciation figures in B/S and in Notes to accounts.
The Auditor has qualified the financials on non-adherence to AS-6, and the management was ok with it for all those years.
I suggested him to atleast now debit depreciation of earlier years of upto 31/3/2014, and for FY 2014-15.
The client do not want to charge depreciation even for 2014-15, 15-16, and only wants to debit in 16-17 when their profits break-even. (They are OK with whatever Qualification the Auditor gives)
he wants to debit depreciation of 16-17, and depreciation of earlier years in installments.
Is that really possible? Is it not un-fair? Doesn't Companies Act penalise? What repurcussions does he have from Income Tax perspective?
How well can I suggest him?
CAclubindia
