Accounting Standard-6 Depreciation Accounting (Key points)

1).Allocate depreciable amount of a depreciable assets on systematic basis to each accounting year over useful

life of asset, useful life may be reviewed periodically.

2).Basis must be consistently followed and disclosed. Any change to be quantified and disclosed.

3).Rates of depreciation should be disclosed.

4).A change in method followed be made only if required by the statute, compliance to Accounting Standard,

appropriate preparation or presentation of the financial statement.

3).In cases of extension, revaluation or exchange fluctuation, depreciation to be provided on adjusted figure

prospectively over the residual useful life of the asset.

4).Deficiency or surplus in case of transfer/change in method be disclosed.

5).Historical cost, depreciation for the year and accumulated depreciation be disclosed.

6).Revision in method of depreciation be made from date of use. Change in method of charging depreciation is

change in accounting policy be disclosed.