On 1 st April 2023, Eleanor Limited purchased a manufacturing Plant for 60 lakhs, which has an estimated useful life of 10 years with a salvage…

Calculation of depreciation as per AS 12 for the financial year 2024-25: If the grant amount is deducted from the value of Plant, then the amount of depreciation will be - 3,00,000 p.a. (₹ 60,00,000 -10,00,000 -20,00,000) / 10 year.If the grant is treated as deferred income, then amount of depreciation will be - 5,00,000 p.a. (₹ 60,00,000 -10,00,000) / 10 year.If the grant amount is deducted from the value of plant, but at the end of the year 2024-25 grant is refunded to the extent of 4lakh then the amount of depreciation will be - 3,00,000 p.a. (₹ 60,00,000 -10,00,000 -20,00,000) /10 year for year 2023-24 and for the year 2024-25 Depreciation will be - 3,00,000 calculated as follows, (₹ 60,00,000 -10,00,000 -20,00,000 - 3,00,000) / 9 years. Note: It is assumed that the depreciation for the year has been charged on the book value on the plant before making adjustment for grant. Alternatively, if it is considered otherwise then the depreciation will be charged after making adjustment for grant. In that case depreciation for the year 2024-25 will be as 3,44,444 calculated as follows, (₹ 60,00,000 -10,00,000 -20,00,000 + 4,00,000 - 3,00,000 / 9 yearsIf the grant is treated as promoter's contribution, then the amount of depreciation will be - 5,00,000 p.a. (₹ 60,00,000 -10,00,000) /10 year.