DEPRECIATION CALCULATION AS PER NEW COMPANIES ACT 2013

DEPRECIATION CALCULATION AS PER NEW COMPANIES ACT 2013

DEPRECIATION CALCULATION AS PER COMPANIES ACT 2013. After applicability of new companies act 2013 from 1st April 2014 Schedule II of companies act has been applied to all type of companies. As per new Schedule II depreciation calculation has been shifted from predefined rates to USEFUL life. Now the new companies act has defined the useful life for each type of asset which is defined in schedule II.
.

For this purpose there is ambiguity present in every one mind that calculation of depreciation on assets which are already purchased before 31st March 2014 on which some depreciation has already been calculated on the basis of old companies act i.e. Companies Act 1956.
.

In this regard ICAI has taken the initiative and published a Free E– book for all the users todownload it. Today via this post we will provide you all the same with direct downloading link for the same.

DEPRECIATION CALCULATION AS PER COMPANIES ACT 2013
.

In brief I will try to sum up the whole method of calculation of depreciation as per new Companies act 2013. For this purpose we have to divide our whole fixed asset register into two main parts.

1. Assets Purchased during the FY 2014-15

2. Assets Purchased earlier i.e. before 31st March 2014

For Assets Type 1 we need not to do so much laborious work. we have to simply Calculate depreciation on the basis of number of days and multiply with the rates.

Rate Calculation Formula in excel = 1 – Power(Scrap value/Original Cost,1/Useful Life)

For Assets TYpe 2 we have to firstly we need Purchased Value, Purchased Date and WDV as on 31.03.2014 for each individual asset separately. After that you need to calculate depreciation rate for each individual asset seperately with the help of formula given below.
.

Rate Calculation Formula in excel =

1 – Power(Scrap value/WDV as on 31.03.14,1/Remaining Useful Life)

Its the crux of DEPRECIATION CALCULATION AS PER COMPANIES ACT 2013. You can download the complete guidance note published by the ICAI from the links given below :-

Download Guidance Note on Depreciation