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Depreciation Procedure
We know that there are 2 methods of Depreciation
- Depreciation as per Income Tax
- Depreciation as per Companies Act
Depreciation method to be used depends upon type of business i.e. whether business is a Company or a Non Company
Difference
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Depreciation for Non Companies |
Depreciation for Companies |
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They follow only Depreciation as per Income tax both for entries and tax payment
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They follow Depreciation as per Income tax For paying taxes And Depreciation as per Companies Act for passing entries |
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They normally follow WDV method and present depreciation as follows
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They also normally follow WDV Method. Presentation is diffetent
Some Companies also follow SLM Method (Straight Line Method as mentioned below)
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They pass the entry Depreciation To Asset
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They pass the entry Depreciation To Accumulated Depreciation
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