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Easy Steps to Calculate Depreciation as per Schedule II for the year 2014-15 Classify Assets as per Schedule II.  Determine useful lif...

Easy Steps to Calculate Depreciation as per Schedule II for the year 2014-15

1. Classify Assets as per Schedule II.
2. Determine useful life as per Schedule II.
3. Calculate Used Life of Assets till 31st Mar 2014.
4. Determine remaining useful life (useful life as per schedule II- used life till 31st Mar 14).
5. Remaining useful life may be round off to the nearest full year.
6. Apply method of Depreciation which is applied in earlier years.
7. Assets as on 1st Apr 2014 either have remaining useful life or Zero remaining useful life.
We can calculate depreciation for the year of 2014-15 with the help of following examples based on above Steps.

Free E Book on Depreciation calculation by ICAI
Ex.1        Assets have remaining useful life and method of depreciation is straight line
Useful life of machinery (under Sch II) - 15 yrs
Cost of machinery (installed on 1.4.2009)- Rs. 5,00,000
Depreciation applied under Sch. XIV- SLM 4.75% Per year depreciation Rs. 23,750
[5,00,000-(5x23,750=118750)= 3,81,250] WDV as on 1/4/2014 Rs.3,81,250
Remaining useful life under Sch II as on 1.4.2014 - 10 yrs
381250-25000=356250. 10% for 10 years.  Per year depreciation Rs. 35,625.
Ex.2 Assets have no remaining useful life as on 1st Apr 2014 and method of depreciation is straight line

Useful life of machinery (under Sch II( - 15 yrs
Cost of machinery (installed on 1.4.1996)- Rs. 5,00,000
WDV as on 1/4/2014 (after 18 yrs) Rs. 72,500
Remaining useful life under Sch II as on 1.4.2014 – Nil
Residual Value 5% of Rs.500000 Rs. 25000
Amount to be debited to opening balance
of surplus account or Debited to P&L A/c -Rs. 47,500
Ex.3        Assets have remaining useful life as on 1st Apr 2014 and method of depreciation is WDV.

 Year Cost/Op.Wdv Depreciation as wdv @13.91% Closing WDV 2009-10 1,000,000 139,100 860,900 2010-11 860,900 119,751 741,149 2011-12 741,149 103,094 638,055 2012-13 638,055 88,753 549,302 2013-14 549,302 76,408 472,894
Calculation of depreciation as per schedule II

 Year Opening WDV Depreciation @20%-WDV Closing WDV 2014-15 472,894 94,579 378,315 2015-16 378,315 75,663 302,652 2016-17 302,652 60,530 242,122 2017-18 242,122 48,424 193,697 2018-19 193,697 38,739 154,958 2019-20 154,958 30,992 123,966 2020-21 123,966 24,793 99,173 2021-22 99,173 19,835 79,338 2022-23 79,338 15,868 63,471 2023-24 63,471 12,694 50,777
Calculation of New Depreciation Rate.
R={1-(s/c)^1/n}*100
s=50,000 , c=472,894 , n=10
R={1-(50000/472894)^1/10}*100
R={1-(0.105)^1/10}*100
R={1-0.798}*100
R= 20.2% or say 20%
Ex.4 Assets have no remaining useful life as on 1st Apr 2014 and method of depreciation is WDV.

 S.no Year Cost/Op.Wdv Depreciation as wdv @13.91% Closing WDV 1 1997-98 1,000,000 139,100 860,900 2 1998-99 860,900 119,751 741,149 3 1999-00 741,149 103,094 638,055 4 2000-01 638,055 88,753 549,302 5 2001-02 549,302 76,408 472,894 6 2002-03 472,894 65,780 407,114 7 2003-04 407,114 56,630 350,484 8 2004-05 350,484 48,752 301,732 9 2005-06 301,732 41,971 259,761 10 2006-07 259,761 36,132 223,629 11 2007-08 223,629 31,107 192,522 12 2008-09 192,522 26,780 165,742 13 2009-10 165,742 23,055 142,687 14 2010-11 142,687 19,847 122,840 15 2011-12 122,840 17,087 105,753 16 2012-13 105,753 14,710 91,043 17 2013-14 91,043 12665 78,378
Assets used more than 15 Years. Remaining useful life is Nil. No depreciation
WDV as on 01 Apr 2014 Rs. 78,378.00
Residual Value 5% of Rs.1000000= Rs. 50000
Amount to be debited to opening balance
of surplus account or Debited to P&L A/c -Rs. 28,378.00

CA Mohan Mittal
M: 9811024242, 9311024242 TOLL FREE NO. 1800-270-5500 E: camlm.delhi@gmail.com

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SIMPLE TAX INDIA: Easy steps to Calculate Depreciation as per Schedule II for the year 2014-15
Easy steps to Calculate Depreciation as per Schedule II for the year 2014-15
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