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AS 6: Depreciation Accounting

A professional application note for accounts teams: what the standard controls, where it appears in company accounting, how to apply it and what evidence reviewers expect. Animated notes with Play, Pause, Replay, English and Hindi voice options are included below.

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AS 6: Depreciation Accounting: interactive explanation

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Professional scope: This is an implementation-oriented explanation for accountants, finance managers, controllers and reviewers responsible for company accounts.

1. What this standard controls

AS 6 is retained here for numbering continuity and historical understanding. Current accounting for depreciation under the AS framework should be analysed under AS 10 and applicable law.

Current position: Withdrawn; depreciation requirements are now addressed through AS 10, Property, Plant and Equipment.

2. Where it appears in the real accounting world

01Reviewing old policy manuals or legacy financial statements
02Migrating accounting procedures to current AS 10 requirements
03Understanding useful life, residual value and method concepts
04Correcting references in templates and ERP documentation

3. Practical application workflow

  1. Do not cite AS 6 as the current operative standard.
  2. Map legacy depreciation policies to AS 10.
  3. Review components, useful life, residual value and method.
  4. Align accounting treatment with applicable statutory requirements.
  5. Update notes, working papers and training material.

4. Real-world application example

A legacy fixed-asset policy says “depreciation is provided as per AS 6.” The accounts team should update the reference to AS 10, document useful-life and residual-value reviews, and ensure component accounting is considered.

5. Journal-entry and accounting record pattern

Current routeDepreciation entry and review are governed by AS 10 and applicable law.
Typical entryDr Depreciation expense / Cr Accumulated depreciation.

Entry wording is illustrative. Actual accounts, tax effects, dimensions and narration depend on the entity’s chart of accounts and facts.

6. Month-end and year-end control file

Controls to operate

  • Search policy manuals for obsolete AS 6 references.
  • Link fixed-asset procedures to AS 10.
  • Annual review of useful life and residual value.
  • Componentisation review for material parts.
  • Reconcile fixed-asset register to general ledger.

Common errors and red flags

  • Continuing to present AS 6 as current.
  • Applying tax depreciation rates as accounting policy without analysis.
  • Ignoring component accounting.
  • No review of useful life or residual value.
  • Depreciating assets before they are ready for intended use.

7. Reviewer questions

  1. Has every AS 6 reference been updated?
  2. What is the AS 10 basis for the method and life?
  3. Are components separately tracked where material?
  4. When was the asset available for use?
  5. Do register, ledger and disclosures agree?

Related standards: AS 10, AS 5, AS 28

Authoritative reference:

Before approving a material conclusion, check the latest ICAI compendium, notified Companies (Accounting Standards) Rules, entity applicability and subsequent amendments.

ICAI Accounting Standards Compendium →
Companies (Accounting Standards) Rules and amendments →

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Professional note: This educational resource does not replace entity-specific analysis, the latest notified standard, law, regulation, audit judgment or professional advice.