03-06-2009, 09:38 PM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by danishayub_76</i>
<br />Dear All.
I want to learn about depreciation methods and rates used in financial reporting. IAS 16 explains the methods to be adopted for depreciation including Straight line method, declining balance method and units of production method. My question is that what provisions and rates are metnioned in Companies ordinance 1984 in this regard. or in other words What companies Ordinance 1984 says regarding depreciation methods and rates.
Awaiting for your response.
Danish Ayub
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Danish Bhayee Company Ordinance is sielent about the depreciation rate. The Schedule -III of Income Tax Ordinance lays down the rate but the companies usually do not use these rates for the purpose of financial reporting. The companies charge depreciation on taking in consideration the usefull life of assets and in accordance with accounting policies of the company. According to ITO,2001 all types businesses are liable to use diminishing balance method.
The depreciation rates of income tax ordinance are used for filling tax return. A company can use any rate for charging depreciation other than rate specified in 3rd schedule of ITO. Two terminologies are used for depreciation with respect to rate i.e Tax Depreciation and Accounting Depreciation.
Regards,
Awais Aftab
<br />Dear All.
I want to learn about depreciation methods and rates used in financial reporting. IAS 16 explains the methods to be adopted for depreciation including Straight line method, declining balance method and units of production method. My question is that what provisions and rates are metnioned in Companies ordinance 1984 in this regard. or in other words What companies Ordinance 1984 says regarding depreciation methods and rates.
Awaiting for your response.
Danish Ayub
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Danish Bhayee Company Ordinance is sielent about the depreciation rate. The Schedule -III of Income Tax Ordinance lays down the rate but the companies usually do not use these rates for the purpose of financial reporting. The companies charge depreciation on taking in consideration the usefull life of assets and in accordance with accounting policies of the company. According to ITO,2001 all types businesses are liable to use diminishing balance method.
The depreciation rates of income tax ordinance are used for filling tax return. A company can use any rate for charging depreciation other than rate specified in 3rd schedule of ITO. Two terminologies are used for depreciation with respect to rate i.e Tax Depreciation and Accounting Depreciation.
Regards,
Awais Aftab
