TaxTMI 
TaxTMI 
Dear All,
can a pvt co. change the dep method from WDV to SLM. If yes then How the diffrerence will be dealt in profit and loss account and in calculation of MAT.
depreciation
22 Jun 2011 
4 Replies 
5124 Views Asked by
Depreciation method change: companies may switch WDV to SLM with disclosures; tax depreciation unchanged and MAT may be affected.
Private companies may change depreciation method from WDV to SLM under AS 6 and company law when there is commercial expediency. The change should be applied in the period of decision with disclosure of current year and prior period impacts; adjustments up to the opening date are reflected in P&L appropriation or brought above the line. Tax depreciation remains governed by tax law (WDV), so statutory depreciation and tax consequences are unaffected; MAT is based on book profit, and increased book profit from lower depreciation can affect MAT, requiring documented rationale and disclosure. (AI Summary)
Private companies may change depreciation method from WDV to SLM under AS 6 and company law when there is commercial expediency. The change should be applied in the period of decision with disclosure of current year and prior period impacts; adjustments up to the opening date are reflected in P&L appropriation or brought above the line. Tax depreciation remains governed by tax law (WDV), so statutory depreciation and tax consequences are unaffected; MAT is based on book profit, and increased book profit from lower depreciation can affect MAT, requiring documented rationale and disclosure. (AI Summary)