Tuesday, February 16, 2016

Guidance note issued on Depreciation as per Companies Act, 2013

Accounting for depreciation by Indian corporates is governed by the provision of Section 123 read with Schedule II of the Companies Act, 2013 and accounting standards, AS 6 and AS 10. To provide a practical guidance on accounting for depreciation (Schedule II) to preparers and auditors of the financial statements, the Institute of Chartered Accountants of India (ICAI) has released a guidance note on the same. Major guidance provided by the guidance note are as follows:
(i)           Depreciation should be charged on the basis of useful life. Useful life is specified in the Schedule II, but an entity may use different useful life subject to certain disclosures.