-Hallo friends, Accounting Methods, in the article you read this time with the title How to Calculate Depreciation Under Company Law 2013, we have prepared this article well for you to read and retrieve the information therein.
Hopefully the content of article posts accounting, which we write this you can understand. Alright, happy reading.
Title : How to Calculate Depreciation Under Company Law 2013
link : How to Calculate Depreciation Under Company Law 2013
How to Calculate Depreciation Under Company Law 2013
How to Calculate Depreciation Under Company Law 2013How to Calculate Depreciation Under Company Law 2013 - Hello Friend Accounting Methods, In the article you read this time with the title How to Calculate Depreciation Under Company Law 2013, We have prepared this article for you to read and retrieve information therein. Hopefully the contents of postings Article accounting, Article depreciation, We write this you can understand. Alright, good read.
Title : How to Calculate Depreciation Under Company Law 2013
link : How to Calculate Depreciation Under Company Law 2013
How to Calculate Depreciation Under Company Law 2013
Before knowing, "How to Calculate Depreciation Under Company Law 2013?" you should know why we are studying it. We are studying it because in this world everything is changing. If you have to live in this world, you need to change. It is not your adjustment with situation but if you will not change on your terms, you will have to change on other’s term. Ok come to today topic. After long time, new company law 2013 has come. If you are accountant or auditor in any company which is operating in India, you need to prepare or audit financial statements as per the new company law 2013 instead following old company law 1956. If you did not read it, buy it and read first company law 2013. In company law 2013, there are many changes regarding calculation of depreciation. We know depreciation is the decrease in the value of any fixed asset.
1. Useful Life of Fixed Asset has Fixed by New Company Law 2013
For calculating depreciation, we need working or useful life. Before this law, we can calculate it on our own behalf. But now, maximum useful life of any fixed asset has fixed by law. If management’s estimated useful life is less than company’s law’s estimation, then follow your estimation as useful life. For example building’s useful life is 60 years. But if you think your building will active upto 40 years, then useful life is only 40 years. If company law’s estimation is less than your estimation, then follow company law’s estimation of useful life in years. And factory building’s useful life is 30. Whole list, you can find company law 2013’s book.
2. Residual Value or Scrap Value of Fixed Asset
It will not more than 5% of original cost. For example if original cost of building is Rs. 100, then scrap value will only Rs. 5
3. Depreciation
Because New company law has applied from 1st April 2014. It means, if you have to calculate written down value of your asset upto 31st march 2014. Then you will have to find the remaining useful life of your fixed asset. And depreciation will be for next
*Depreciation Under Straight line Method = WDV or Carrying Value of Asset on 31st march 2014 / Remaining Useful life
*Depreciation Rate under Written down Method = ((1)- (salvage value or scrap value or residual value/ WDV as on 31.03.2014)^(1/ remaining period of useful life))*100 or brief formula
R= {1 – (s/c)^1/n } x 100
Important :
- New rules will apply only tangible fixed assets.
- Now if fixed asset is Rs. 5000 and 100% depreciation allow rule will not apply.
- New rate under SLM and WDM also given in new law.
- For calculating remaining useful life, you have to find purchase date of asset and find total useful life of as per company law 2013. For example, you have buy any fixed asset on 1st April 2010 and it means, we have consumed its life of 4 years upto 1st April 2014 and as per new law 2013, if total useful life is 20 years, then remaining useful life is 16 years.
Thus Article How to Calculate Depreciation Under Company Law 2013
that's all the article How to Calculate Depreciation Under Company Law 2013 this time, hopefully can give benefits to all of you. alright, see you in posting other articles.
You now read the article How to Calculate Depreciation Under Company Law 2013 with link address http://accountingmethode.blogspot.com/2016/06/how-to-calculate-depreciation-under.html
[ad_2]
Source link : How to Calculate Depreciation Under Company Law 2013