However, since SLM constitutes historical price and WDV book value of the asset as of date, there is a higher depreciation rate for WDV and hence lower for SLM. Also, the depreciated amount over the life of the asset is higher in the first few years for WDV, while in case of SLM it is same over the years.
On the other hand, for the latter part of the period considered of a fixed asset, the depreciation amount for WDV would be lower and for SLM it would be higher. This methodology would have been followed in case of Jet Airways, which would result in a comparatively lower depreciation after switching to SLM. If one excludes exceptional items, the company is once again in net loss, which amounts to Rs 772.49 crore. It must be noted that narrow body aircraft constitutes 65 of the total 85 aircrafts and majority of the 65 aircrafts is company-owned and hence accounted for depreciation. This could be one of the reasons which has resulted in a higher amount of reversal (the amount resulted due to switching to SLM).
Contributed by Rahul Jain