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.
