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Salient Features of Schedule II of the Companies Act, 2013

Salient Features of Schedule II of the Companies Act, 2013

January 6, 2024

Prominent Features of Set Up II of the Companies Act,2013 The current execution of the Business Act, 2013 is appropriately treated as commencement of a new period in business legislation in India. It has brought sweeping modifications in different guidelines and policies governing the performance of corporates in India as compared to the old Business Act, 1956 (the old Act). One such change relate to Depreciation consisted of in Arrange II of this brand-new Act, introducing the principle of useful life as versus minimum rates of devaluation used up until now. The old Act of 1956 offered various minimum rates of depreciation on depreciable properties, whereas Schedule II inserted under the brand-new Act attends to the allocation of depreciable amount of a possession over the beneficial life of an asset.

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The different elements of Devaluation as consisted of in the Companies Act, 2013 as compared to the old Business Act, 1956 are talked about hereunder.Recently we supply complete information for Depreciation Accounting under the Business Act, 2013 Now you can scroll down below and inspect total information relating to ” Salient Functions of Schedule II of the Business Act, 2013″

The concept of useful life is essential in calculation of depreciation as per the new arrangements

  • The Business Act, 2013 vide its Schedule– II recommends for both calculation of depreciation based on beneficial life of an individual asset as well as accounting of depreciation.
  • The ministry of business affairs vide its alert dated 16 th February 2015 has clarified that a business which follows the accounting standards defined in the Companies (Accounting Standards) Guidelines, 2006 will comply with such standards just and not the Standards defined in the rules defined in the new act. Accordingly, the requirements of accounting associated to depreciation accounting i.e. Accounting Standard 6 on Devaluation Accounting as defined under the old act will be considered to be the accounting standards and will continue to run till the accounting requirements are specified by the Central Government under area 133 of the brand-new Act
  • For the function of calculating depreciation, the brand-new act specifies the term “depreciable amount” as the expense of a possession, or other amount substituted for expense, less its residual value, such residual worth being 5 percent of the initial cost of the asset.

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