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State of Madhya Pradesh - Section

Section 185 in The M.P. Municipal Accounts Rules, 1971

185.

The amount of annual contribution to the Depreciation Fund shall be such that the contributions together with the amount by which the fund is improved by investment shall be equal at the end of the period the plant is expected to last, to the original cost of the plant. For the purpose of this rule the rate of improvement shall be calculated at 2-½ per cent. The annual contribution shall be calculated with reference to the following table :-Table showing the annual sum which accumulated at compound interest will amount to 1 at the end of the period (vide Archers' table).
Average life of the plant Fraction annual contribution at 2-½ per cent
8 1155
9 1015
10 903
11 811
12 735
13 671
14 616
15 568
16 526
17 489
18 457
19 428
20 401
21 378
22 356
23 337
24 309
25 302
26 287
27 273
28 260
29 248
30 237
Example. - If the value of plant be say Rs. 20,000 and the assumed life be 20 years, the annual contribution to the Depreciation Fund at 2-½ per cent of rate of improvement should 0401 x 20,000 rupees.