Can anyone guide me please as per Accounting point of view
In the books of company Car WDV is Rs 125,000 as on 31/03/2022
Car was purchased in April 2018.
Car sold on 16th December 2022 for Rs 95,000
I would like to know that should I charge depreciation from 1st April 2022 to 15th December 2022 .
So after charging depreciation from 1st April 2022 to 15th December 2022 , WDV will get reduced and what will be the effect on loss on sale
Please can anyone share with their working
You can charge depreciation. But once you declared it held for sale, you can't charge depreciation. Loss will reduce because any depreciation will reduce the life and value of asset. But there is a criteria to dispose an asset. Lower of cost or fvlcs. That means if you arranged to sell at 20,000 market price or fvlcs, the cost of the vehicle is 30,000, but you could only get 15000 for it, then what is the loss? 5000. After depreciation, if the car value is 15000 and this is called cost value, there is no loss.
CAclubindia
