Please Help: Can Depreciation be claimed as Direct expenses
Posted Date : 28-Sep-2013 , 06:30:15 pm | Posted By: CA. Krishnakant Agrawal
Category :
Audit | Answers :
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Comments :
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One of my client is having business of Giving vehicle on Hire. Can he claim depreciation under direct expenses or he have to claim as indirect exp. As Depreciation amount is very big and will impact ratios. |
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Answers:
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 Answer by: Vaneet Gupta |
| Please clarify, if he is providing asset on Operating Lease or Finance Lease. In case of Finance lease no depreciation can be expense off, being vehicles not to be capitalized, where as in case of Operating lease, depreciation can be claimed as operating expense, being directly pertaining to the business.
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| Comments |
| Posted By : Shilpa GB |
01-Oct-2013, 11:51:33 |
| as per my view- your business there is no trading P & L in your case it is Income and Expenditure account will come
so there is G P Ration all the expenses concerned to your business is expenditure only and NP ration comes , there by there is no discrimination of Direct and Indirect Expenses................
and if you treated as Direct or Indirect - depreciation is Indirect expenses because Rate of depreciation is fixed and
on the basis of ware and tare, time factors its not change on the basis of your business capacity and you cannot
identify the depreciation concerned to each transaction of operation which associate.
It purely Indirect. |
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