01-05-2007, 08:26 PM
Mr. Mahtab CBR decides depreciation rates for tax purposes....
No one can direct the depreciation rates in a country for accounting purposes...
IAS says that it is upon the management intention. As the depreciation rates should depict the inflow of economic benefit attached with the assets. So, it is only the management of the company that decides the depreciation rates. They can use any rate, if they have the justification of inflow of economic benefit.
And difference arises in tax and accounting depreciation due to above given explanation.i.e. CBR directs a signle rate for a class of asset, but management may have a differing opinion and may charge different rates...
No one can direct the depreciation rates in a country for accounting purposes...
IAS says that it is upon the management intention. As the depreciation rates should depict the inflow of economic benefit attached with the assets. So, it is only the management of the company that decides the depreciation rates. They can use any rate, if they have the justification of inflow of economic benefit.
And difference arises in tax and accounting depreciation due to above given explanation.i.e. CBR directs a signle rate for a class of asset, but management may have a differing opinion and may charge different rates...
