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General Accounting Discussions: Depreciation (I'm a beginner and need help)

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  1.  
    • CommentAuthorkb1975
    • CommentTimeJul 17th 2007 edited
     
    A manager complained about the amount of depreciation charged on the plant for which she was responsible. the market value of her plant continued to increase, yet she was hit with large depreciation charges on her income statement and the value of her plant and equipment on the balance sheet goes down each year. this doesn't seen fair. Comment on this statement, focusing on the relation of asset values on the balance sheet to market values of the assets.
    Thankful People: Abdu
    • CommentAuthorchris
    • CommentTimeJul 24th 2007
     
    Well as per Section 205 of the companies act, Depreciation has to be charged compulsarily Every year irrespective of the market value of the asset
    Further, the measure of depreciation may vary as per accounting rules.
  3.  
    chriss you have command really you explained in a good way! I agree with you
    • CommentAuthorpk
    • CommentTimeDec 21st 2009
     
    The market value of any asset cannot be reported in the Balance Sheet, instead, it will be reported at cost less depreciation.
  5.  
    Yes its the principle that you cannot report the asset value in to the balance sheet!
    • CommentAuthormgogoing
    • CommentTimeJan 5th 2010
     
    But, everyone knows this, so it should not reflect badly on her.
  7.  
    Ya you are right but what solution you ant? clear it!

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