DEPRECIATION

DEPRECIATION 3 &
Objectives of
Providing Depreciation IF PPE IS SELF CONSTRUCTED 5:
1 -
↳
I 1 cost of PPE includes :

Equipment (PPE)
is
charged Property Plant
on a &
related .
1: All
directly costs

allocated basis
what is
Property
a Plant e
Equipment
2. costs that can be on a
systematic
IFixed Assets) Internal added to of
:
2
NOTE
-
-
: -

profits cannot be cost

1 PDE
-

Tangible
~

Used in Expected to be used business constructed

My Building
Assets -
Production of Goods
. for a
period >months -

cement
manufacturing
of services
.
Supply
-

3 :

Goolbag
EECPused
: SP:
500/bag
=> Rental to others &
for
-
Administrative Purpose E construction of building
I I He

Depreciation is
charged on the Depreciable Amount Cement
Bags Add the cost price to the

Of PPE-
↑

4- cost
Burj Khalifa
-
Of PPE -

Depreciable Amount = 1 -
Cost
constructi in ST
used months
- -

less : 2 .
Residual OR SCRAP
Value VALUE 2
4:
ASCERTAINMENT OF COST OF A PPE for # dept
Depreciable Amount
e
~
months o

tocost
a
2 :

FOR CHARGING DEPRECIATION

If PPE IS PURCHASED machine add
REASONS
I
↓

4
Y
* Wear & 2= ! h
3 in - Continuation of
Tear
Efflux
(Passage) Technological
Decrease
> Factory >
Ready for work At
-
4 :

of Time
>carriage/freightShipping
Obsolescence Market Value
-
Premis see
A cost Of
* PPE
site
preparation
>
costs
- >
-

mines includes initial

Incase of because of depletion also
5
Loading/unloading costs
-
>
-
-
.

T
>
-
Installation -
costs

Price
estimate decommissioning
of
1 Purchase >
-
Salary paid to expert
:

Discounts
an or
dismantling or

less : on the above >

-
Trial Run ·
costs removal of PPE
. This

NOTE : Taxes to be included cost is added at its

--- ↓
if present value
in the above prices only

*
they
are
non-refundable or
All incurred to make PPE
for its
depreciation costs the
ready
-
methods of
to this the credit for same is not
applied
-

available
intended work is added to the cost of PPE
 EXAM ORIENTED BATCH - JUNE 24
CA Foundation- New Syllabus - Accounts

MOST IMPORTANT CHAPTERS FROM EXAM POV

TO BE TAUGHT IN DEPTH

IN DEPTH CONCEPTUAL MULTIPLE QUESTION NO SHORTCUTS &

COVERAGE SOLVED IN CLASS & FOR HW RUSHING THE SYLLABUS

COURSE DURATION

BOOKS

CHAPTERS TO BE COVERED

TESTS

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