Providing more clarity for companies, the government has made changes to norms for determining depreciation of assets.
The new Companies Act emphasises on the concept of useful life of assets by providing indicative life and residual value for assets in Schedule II.
The Corporate Affairs Ministry has now said that useful lives of assets and the residual value specified in Schedule II should be used by companies.
If companies use values that differ from the Schedule II, then they would be required to adequate disclosures in their financial statements to justify the variation along with technical advice.
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