sir i have a query that A pvt ltd company is following SLm method under new co act 2013 how to change method to wdv ?? how it is possible ?? first we have to calculate dep upto 01/4/2014. then again we calculate dep from 01/04/2014 to 31/06/2017 n then charged diffrence in dep as per slm upto 2017 in the p & L A/c ?? very much confused ??plzz reply
As per the provisions of Accounting standard 1, the company is required to follow uniform accounting policies. Therefore the company is required to apply consistent accounting policy from period to period. A change in method of depreciation can be made only if it is required by law, or for compliance of accounting standard, or if change is necessary for better presentation of financial statements. As per accounting standard 6, when there is change in method of depreciation, depreciation should be recalculated as per new method from the date when asset is put to use. There you are required to calculate the depreciation from the date when asset is put to use. And the deficiency or surplus arising from recomputation of depreciation should be charged to Profit and loss account in the year of change i.e. in 2017.