Kindly let me know what will be the accounting treatment of Unabsorbed Depreciation in a particular year when there is a huge profit to adsorb such unabsorbed depreciation ....
4 Replies
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 31 January 2013
Unabsorbe depreciation can be adjusted from any income and in any year. If you have a huge profit in the current year you can adjust the whole unabsorbed depreciation
CA RAJA SAHA
(Dy Manager(F &A))
(321 Points)
Replied 31 January 2013
Thanx for suggestion...but what will be the accounting entity since we have already charge the unabsorbed depreciation in the earlier years accounts.
CA Ashish Gupta
(Internal Audit GST Balance Sheet Income Tax )
(55 Points)
Replied 01 February 2013
There will not be any jornal entry for unabsorbed depriciation. Unabsorbed depriciation is a concept in Income Tax , it has nothing to do with Accounts.
Huge depriciation in a financial year will result into losses, as such in next financial year when there are large profits it will set off last years losses an will result into profits.
CA Satyen Sharma
(Head - Accounts and Finance)
(71 Points)
Replied 04 February 2013
I agree with Ashish
Satyen
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