Excel for
Chartered Accountants
Calculating Depreciation under the provisions of the Companies Act, 2013 in accordance with Schedule-II is something that is bothering everyone. The process becomes more tedious especially for companies having large asset blocks consisting of multiple assets added over number of years.
Essentially, to begin with calculating depreciation under the 2013 Act requires:
(a) Finding out the useful lives of each individual asset comprised in the written down value of the block as on 31-03-2014
(b) Finding out the WDV of each individual asset comprised in the WDV (as on 31-03-2014) of the block, that has not outlived its useful life.
Illustration:
As per a typical fixed asset schedule of a company (say xyz limited) there is an asset block called “computers” consisting of desktops, laptops or other end user devices which are depreciated on WDV basis @ 40%.
Since the useful life of Computers is 3 years as per Schedule-II, this imply that any asset that has lived 3 years as on 01-04-2014 (acquired before FY 2012-13) would have no remaining useful life and needs to be written off. An analysis of the block “computers” as per schedule of Fixed Assets of xyz ltd for last three years ( i.e. FY 2011-12, 2012-13 and 2013-14) reveals the following:
|
|
FY 2011-12 |
FY 2012-13 |
FY 2013-14 |
|
Opening WDV |
108000 |
102461 |
82960 |
|
Additions |
50000 |
25000 |
60000 |
|
Depreciation |
55539 |
44501 |
48200 |
|
Closing WDV |
102461 |
82960 |
94760 |
The dates of additions for all the three years as above are as follows:
|
Date of Addition |
Amount |
|
01/06/2011 |
30000 |
|
15/12/2011 |
20000 |
|
03/04/2012 |
5000 |
|
20/01/2013 |
20000 |
|
13/07/2013 |
38000 |
|
10/10/2013 |
22000 |
As said earlier, as the useful lives of computers is 3 years, we should be concerned only with the assets that still have some useful years left as on 01-04-2014 and for this reason only the additions made in FY 2012-13 and FY 2013-14 deserve attention. First step would be to find out the WDV as on 31-03-2014 of the additions of Rs. 85000/- made during FY 2012-13 and FY 2013-14 which form part of the total WDV of the block Rs. 94760/-
Once we find out that, rest of the amount would only represent WDV of the computers which have outlived their useful lives.
At this stage, this calculator might give you a quick help in ascertaining the WDV of the additions which comes to Rs. 57873/- meaning thereby that remaining WDV of Rs. 36887/-(94760-57873) represent the part which has to be written off.
If you have already started using ABCAUS Excel Depreciation Calculator under the Cos Act, 2013, in the “opening sheet” you can start filling opening WDV right from this calculator. Also you may write the amount of Rs. 36887/- by a single entry say “computers to be written off” or whatever you like to term it.
Please note that this Opening WDV Calculator works only for assets for which useful lives prescribed does not exceed 30 years. In fact there is only one asset “Building RCC Frame” that surpasses 30 years life for which you will have to pull up the socks.
As evident, this splitter is meant for WDV method of depreciation only. Splitting the additions for SLM method should not be a problem for anyone, I guess!
Any error noticed might be reported at
info@abcaus.in
Download ABCAUS Excel Fixed Assets Opening WDV Calculator as per Companies Act, 2013
Excel Auto Fixed Assets Opening WDV Calculator from Dates of Additions for Depreciation Calculation under Companies Act, 2013 Version 5.11 |Updated 26-07-2015|
