Easy Steps to Calculate Depreciation as per Schedule II for the year 2014-15
- Classify Assets as per Schedule II.
- Determine useful life as per Schedule II.
- Calculate Used Life of Assets till 31st Mar 2014.
- Determine remaining useful life (useful life as per schedule II- used life till 31st Mar 14).
- Remaining useful life may be round off to the nearest full year.
- Apply method of Depreciation which is applied in earlier years.
- 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.
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-(5×23,750=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