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For example, a question has depreciation â?¹40000 and provision for depreciation asâ?¹110000 in trial balance. And asset value is â?¹5800000. How should we post it in P/L and B/S.
Answers (8)
ruchi lahoti
If the asset is to be carried at historical cost then, Depreciation a/c Dr. To Provision for dep P&L a/c Dr. To Depreciation a/c
In the financial statement of the company
Thread Starter
Susai YappanIn the financial statement of the company
Just increase the provision for depreciation or accumulated depreciation
ruchi lahoti
Just increase the provision for depreciation or accumulated depreciation
How, . In the book . The depreciation is posted in p/ L under the heading depreciation and the provision for depreciation deducted from the fixed asset in B/S.
Thread Starter
Susai YappanHow, . In the book . The depreciation is posted in p/ L under the heading depreciation and the provision for depreciation deducted from the fixed asset in B/S.
Can we not deduct depreciation from provision to depreciation
Sudha Reddy
Depreciation is shown as expense in P&L, Provision for dep 1,10,000 is reduced from Fixed Asset value 58,00,000 under Non-Current Assets : Fixed ASsets in Balance Sheet
Why sooooo,...,... it should be deducted and reason.please?
Thread Starter
Susai YappanWhy sooooo,...,... it should be deducted and reason.please?
Fixed assets are companyâ??s tangible assets that are relatively durable and used to run operations and generate income. They are not used to be consumed or sold, but to produce goods or services. Due to the long-term use, the value of fixed assets decreases as they age. Depreciation is the allocation (over the useful life) of the acquisition cost of a fixed asset caused by a decrease in its value. At the end of each financial year, we debit the depreciation expense account and credit the provision for depreciation (on relevant fixed asset account) with the amount of depreciation calculated for the year. For income statements, depreciation is listed as an expense. It accounts for depreciation charged to expense for the income reporting period. On the other hand, when itâ??s listed on the balance sheet, it accounts for total depreciation instead of simply what happened during the expense period. Your balance sheet will record depreciation for all of your fixed assets. This means youâ??ll see more overall depreciation on your balance sheet than you will on an income statement. Equipment is listed on the balance sheet at its historical cost amount, which is reduced by accumulated depreciation to arrive at a net carrying value or net book value.
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