Provision for depreciation

Provision for depreciation records accumulated depreciation. It is an asset contra account, hence a credit balance as shown as a deduction from the related fixed asset in the Balance Sheet

Swetha S

CA Inter

★ 15K+

08-May-22 12:00

U can post it in liability side or can reduce it from assets

Pandusml V

CA Final

★ 4K+

08-May-22 12:03

You cannot post it on liability side

CA Suraj Lakhotia

Admin

08-May-22 12:06

Why sir provision is liability right???

Kiran Vijay

CA Final

★ 4K+

08-May-22 12:10

Sir here they gave like thus butð?¤?ð?¤?ð?¤?

Pandusml V

CA Final

★ 4K+

08-May-22 12:13

provision for depreciation is created as a means to write down the values of a fixed current asset and for presentation purposes the provision is normally netted off the asset so that the net book value of the asset is shown on the balance sheet.

Swetha S

CA Inter

★ 15K+

08-May-22 12:19

Provision for depreciation is not a liability. When you term something a liability - there has to be an obligation to pay. Provision for depreciation is not to be considered as a liability. It represents diminution in value of asset

CA Suraj Lakhotia

Admin

08-May-22 13:18

This is incorrect.

CA Suraj Lakhotia

Admin

08-May-22 13:18

Then what is the nature of provision for depreciation sir?

Kiran Vijay

CA Final

★ 4K+

08-May-22 13:30

Ok sir

Pandusml V

CA Final

★ 4K+

08-May-22 14:29

It is just the accumulated depreciation which shows the diminution in value of assets to the extent of usage of Assets.

shalu Muthukumar

CA Final

★ 1K+

08-May-22 16:13

It cannot be considered as liability

Priyanka R

CA Final

★ 20K+

08-May-22 18:09