Causes of DepreciationDepreciation may be of two types :-
(1) Internal-Depreciation which occurs for certain inherent normal causes is known as internal depreciation. The causes of internal depreciation are : (a) Wear and Tear-An asset declines on account of continued use e.g. building, plant, machinery etc. such decline depends upon quantum of use of an asset. If a factory works double-shift instead of single shift, depreciation on plant and machinery will be doubled. It is obvious that such loss is unavoidable. An asset may be kept in proper working conditions through repairs for the time being, but it can not be done so permanently: At one time the asset will become unfit for repairs, when it will no longer be suitable. (b) Depletion-Some assets decline
in value proportionate to the quantum of production, e.g. mines, quarry etc.
With the raising of coal etc. from coal mine, the total deposit reduces
gradually and after some time it will be fully exhausted. Then its value will be
nil.
(1) External-Depreciation caused by
some external reasons is called external
depreciation. The causes of external depreciation
are:
(a) Obsolescence Some assets, though in proper
working order, may become obsolete. For example old machine becomes obsolete
with the invention of more economical and sophisticated machine, whose
productive capacity is generally higher and cost of production is lesser. In
order to survive in the competitive market the manufacturer must install new
machine replacing the old one.
(b) Passage of timeSome assets diminish in value on
account of sheer passage of time, even though they are not used e.g. lease hold
property, patent rights, copy rights etc.
(c) AccidentsAssets may be destroyed by abnormal
reasons such as fire, earth quake, flood etc. In such a case the destroyed asset
may be written-off as loss and a new one purchased.
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Central Goods and Services Tax (CGST) Rules, 2017 Draft government Approved Format Under Goods and Services Tax - Invoice Rules What is GST Compliant Business? What are the specific mandatory fields in an GST compliant invoice? Why the invoice an important financial instrument? What are Registered and Un-Registered Dealers? There is a lot for your business to catch up on those links along with online tax filing and registration for trading. Give us the details of required work you want in the off-the-shelf VAT accounting system and we shall make it GST compliant invoicing and accounting for your business at nominal additional charges. Cheers. Happy Accounting. If you want to know the details of for making VAT/CST system compliant to GST system: Standard rate of $15 per man hour shall be applicable for making any of off-the-shelf VAT based accounting software systems into CGST/SGST Compliant Accounting. Give the details of customization required in any of our off-the-shelf VAT accounting systems made for various business to get a quote of additional charges. See demo of software on website. See official Indian Government CGST/SGST Specification on the panel above here. Click for more information on Value Added Tax (VAT). Free Download of Full Featured Software - Try Full Featured Software Before Order - Time Limited 30 days Full Featured Version of these software are available for download from our website www.freeaccounting.in. HiTech Billing, Accounting Software Off-the-Shelf versions are available for Business, Traders, Industry, Hospital, Hotel, Petrol Pump, Medical Store & Distributor, Automobile or Motorcycle Dealers, Newspaper or Magazine Publishers, VAT Accounting & Billing and Commodity Brokers. | ||||||
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