hey is it ok if company doesnot charge depreciation on Plant and machinery?reason of not charging depreciation being that plant is not in use.or is it complusory to follow rates given under companies Act?Please resolve this query fast.
8 Replies
aasita
(ACA)
(387 Points)
Replied 12 December 2008
but after being put to use if asset remains idol and wht abt reduction in the value of asset bcoz of change in technolgy or wear and tear
Prabeer
(B. COM (H) CA & CS Final)
(5484 Points)
Replied 12 December 2008
Depreciation has to be charged if the asset has been purchased & put on hold for more than 6 months.
saran
(Artical student)
(20 Points)
Replied 12 December 2008
Depreciation has to be charged irrespective of whether it is put in use or not.
Jeet Biswas
(ACMA (in Service))
(5073 Points)
Replied 12 December 2008
if not in use, the asset doesnt go thro' wear & tear, agreed.
but as obsolescence cannot be avoided, providing for depreciation is prudent.
Devendra
(Qualified Audit Assistant)
(521 Points)
Replied 15 December 2008
Even if the asset is not put to use, the depreciation has to be charged by the Company due to its normal wear and tear.
For all companies the rates of depreciation are given in Schedule XIV of the Companies Act, 1956 which has to be strictly followed.
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