Sravanthi (CA Final ICWA Final & M.B.A) (737 Points)
28 August 2012Hai Frnds,
I have a small doubt regarding Depreciation. When Written down value comes to below 1000/-.( for Eg. Asset Cost - 200000/-) What is accounting Treatment? Is it continue to show the balance or to write off the amount in the Current Year? Pls Frnds help me its very urgent.
Thanks In Advance.
Rajesh Kandoi
(Practice)
(39 Points)
Replied 28 August 2012
Dheeraj
(Learner)
(1100 Points)
Replied 29 August 2012
yes, if the asset value is less than ₹5,000 and the wdv does not constitute more than 10% of total cost.
Depreciation shall be charged at 100%
The above law is applicable only for those assets which are subject to normal wear and tear and having usable life.
Otherwise it would not be statutorily necessary to charge furthur depreciation if asset value has been already reduced to 5% or less (i.e no depreciation, opening wdv and closing wdv will be same uptil sale of asset)
Schedule XIV and Section 205
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