||As per Schedule II of the Companies Act, 2013 the useful life of Plant and Machinery and in generation of power is 40 years, but as per the company, useful life is much less. What the company should do?
||Note no. 3(i) of Part ‘A’ of Schedule II of the Act, provides as under: “The useful life of an asset shall not be longer than 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 uses a useful life or residual value of the asset which is different from the above limits, justification for the difference shall be disclosed in its financial statement”. Thus, the querist should obtain technical evaluation report for claiming higher depreciation i.e. claiming useful life less than Schedule II of the Act.
||CA. H. N. Motiwalla
||Schedule II of the Companies Act
||depreciation, plant and machinery, useful life