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RCOM – The Depreciation change

One of the points I wrote in an earlier post (RCOM Shows You What’s Wrong With Corporate India: Veritas) was that RCOM had changed depreciation for telecom equipment from 10 years to 18 years. That bit is confirmed.

From the 2008-09 Annual Report:


From the 2009-10 Annual Report:


(What might help find this kind of issue is XBRL, where you can actually compare (if they choose to give such differences in XML instead of text!). But this was an interesting find – who depreciates ANYTHING over 18 years that has electronics in it? )

Wait, my mother has a TV that was bought in 1995, and it continues to work, though it’s been relegated to a room where it’s hardly used. Maybe I’m wrong, but I think there is cause for concern if RCOM believes it can actually keep telecom equipment for 18 years. Even 10 sounds zany.

Oh, and also, check out this declaration of accounting jugaad: (latest results)


(Their profit for the year was 1346 cr. so it’s not that big an impact there, but the revenue impact is 10%)

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