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Yes, many companies use two or more methods of depreciation.It is acceptable and common for companies to depreciate its plant assets by using the straight line method on its financial statements, while using an accelerated method on its income tax return.A company could also be depreciating its equipment over ten years for its financial statements, while using sevenyears for its income tax return.Even the depreciation for financial statements could consist of some assets being depreciated using the units of production or units of activity method, while other assets are depreciated using the straight line method.
Yes. This is controlled by local laws and regulations.
yes, it is very possible to use two depreciation method depnding on the tangibleasset.However, if the tangible assets in the company is not different than others then it is recommended that to use one method of depreciation either straight line or reducing balancing method to ensure consistency in the Financial statements. It all comes down to economic useful life of an asset. Company can apply one depreciation policy to fixtures and fittings and other depreciation method to Property and plant. BUT if one depreciation method is selected say straight line method for PPE then same depreciation method should be applied to same class of assets as per IAS16
Companies have to adopt a method of depreciation in line with the Company Law for accounting in books.Second method,if different, can be used for complying with Incometax Act off the Accounts books.
During claims, Insurance can allow depeciation on a different scale.
Yes, indeed. Basically depreciation method used should reflect the pattern in which the asset's economic benefits are consumed by the entity. Thus if a company elects to adopt the straight line basis for a certain class of assets, it is not necessary that the same depreciation method is adopted for all other assets. For instance, plant and machinery may be depreciated using another basis while buildings may be written off using the straight line method.
The method adopted depends upon how fairly it accounts for the asset's usage and the manner in which it is consumed by the entity.
It depends upon the class of assets owned by the company. The financial structure and policies of the company with sole consent of the management decides to use either one or more depreciation methods. At the end a healthy balancesheet of the company matters.
yes companies can use dual depreciation policies. specially in manufacturing companies where some time due lack of planning a machinery may not have any production and therby unit of production method of depreciation will help here to the company where no depreciation will be charged during that period. however a long period of such non charged depreciation can come in form of repairs and mantainance of the machinery.
it is acceptable by big5 audit companies.
Yes, according to the nature of the assets and also according to the reporting method.
Yes, many companies use two or more methods of depreciation.one for Finalcial Purpose while as other for Taxation purpose
