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Reply from Ajat_Raheem on Mar 28 at 11:39 PM Hi. VindhyaDhar,
Thank you very much for the immediate response.
By the way, why we want to use both the option is because the business some time transfer asset with a profit margin and some time at the NBV. That's' why?
So we want to keep the both scenarios open.
Regards,
Asar
| | | ---------------Original Message---------------
From: Vidhya Dhar
Sent: Wednesday, March 28, 2012 8:30 PM
Subject: Asset Depreciation at an Inter Company Transfer Scenario
Hi
Let us limit the discussion to the asset transfer and ignore the
controlling area part since it does not appear to me as a relevant factor
in this discussion of asset transfer.
An asset acquired by company code X @ 100000 can be transferred after an
year's use @ a net book value of 80000 and depreciated in company code Y @
20000 across the balance life of 4 years. ( am assuming that company code Y
buys by paying 80000).
An asset acquired by company code X @ 100000 can be transferred after an
year's use @ 100000 and depreciated @ 25000 across the balance life of 4
years. ( am assuming that company code pays 100000 for a second hand asset
which is worth 80000 at the time of such transfer....in other words,
Company code X incurs a profit of 20000 in transferring the asset with NBV
80000 whereas compay code capitalizes the asset 100000 to be depreciated in
4 years).
I do not understand what you mean by exercising both options. Company code
X has two possible choices and it can select one of them.
If the transfer happens at NBV (viz. at cost ) , then option 1 happens. If
the transfer is with a profit in the hands of company code X, then option 2
happens.
Regards
VidhyaDhar |
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