DepreciationIn this web primer we will also
discuss:
Life span of an asset to a business
rests primarily, on the purpose of its acquisition and secondary, on its nature.
An item acquired for immediate consumption or sale is a short-lived asset and
that meant for prolonged use, is long lived asset, though both produce revenues.
Whereas the former asset expires within one year of its acquisition, the latter
asset lasts longer. Hence almost entire expenditure on a short lived asset
becomes an expense and is matched against current year's revenue. But the
position is otherwise with a long-lived asset which wears out or depreciates
over a long period. Accordingly, the outlay of a fixed asset is spread over
several years and annually only a fraction thereof expires. Simply, this
fraction, called expired cost or depreciation, is charged against current
revenues and the rest, termed un expired cost, is carried forward for future
expiration.
"Depreciation may be defined as the
permanent decrease in the value of an asset due to use and/or the lapse of the
time." -Terminology of Institute of Cost and Management Accountants, England
"Depreciation is the permanent and
continuous diminution in the quality, quantity or value of an asset." -Pickles
"Depreciation may be defined as measure of the exhaustion of effective life of an asset from any cause during a given period." -Spicer and Pegler "Depreciation is' the gradual and permanent decrease in the value of an asset from any cause."-Carter Objects of making provision for
depreciation
For attaining following objects, depreciation accounting is a must for every business: (i) Recovery of cost incurred on
fixed assets over their useful life so as to keep owner's capital intact;
(ii) Provision is for replacement
cost on the retirement of original assets ;
(iii) to include the depreciation
in the cost of production to find out the correct cost of production;
(iv) to find out correct profit for
the year ;
(v) to find out the correct
financial position through balance sheet.
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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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