Notification dated: 29.08.2014 - Amendment in schedule II of Companies Act, 2013

Ministry of Corporate Affairs vide notification dated 29th August 2014 has made amendment in schedule II of the Act related to Useful Lives to Compute Depreciation.

The text of the amendment is reproduced as below:-

1. In Schedule II of the Companies Act, 2013, -

(a) in Part 'A', in paragraph 3, for sub-paragraph (i), the following sub-paragraph shall be substituted, namely:-

i. The useful life of an asset shall not ordinarily be different from the useful life specified in Part C and the residual value of an asset shall not be more than five per cent of the original cost of the asset:

Provided that where a company adopts a useful life different from what is specified in Part C or uses a residual value different from the limit specified above, the financial statements shall disclose such different and provide justification in this behalf duly supported by technical advice";

(b) in Part-C , under the Heading Notes -

(i) for paragraph 4, the following paragraph shall be substituted namely -

"4(a) Useful Life specified in Part-C of the schedule is for whole of the asset and where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately.

(b) The requirement under sub-paragraph (a)  shall be voluntary in respect of the financial year commencing on or after April 1, 2014 and mandatory for financial statements in respect of financial years commencing on or after April 1, 2014.

(c) in paragraph 7, in sub-paragraph (b) for the words "shall be recognized", the words "may be recognized" shall be substituted