Research Committee of the Institute of Chartered Accountants of India (ICAI) has issued Draft of the ‘Guidance Note on Some Important Issues Arising from Schedule II to the Companies Act, 2013’and has invited comments latest by 25-11-2015.

Comments should be sent in writing to:
The Secretary, Research Committee
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg, New Delhi – 110 002,

Comments can also be sent by e-mail at research@icai.in .

Earlier in February, 2015, ICAI had come up with an Application Guide on the Provisions of Schedule II to The Companies Act, 2013

While the stated objective of the said application guide was to provide an authoritative position of the ICAI on the issues arising out of the amendment in schedule-II on the Provisions of Schedule II to the Companies Act, 2013, the stated objectives of the draft guidance note are to provide guidance on certain significant issues that may arise from the practical application of Schedule-II with a view to establish consistent practice with regard to the accounting for depreciation.

The draft GN has clarified that a Continuous Process Plant (CPP) means a plant which is required and designed to operate for twenty ‐ four hours a day. For example, there can be plants which though may operate round the clock 24 hours a day, yet their technical design is not such that they have to be operated 24 hours a day. It has been also clarified that interpretation of CPP remains the same as per Schedule XIV of the Companies Act 1956.

The draft GN has elaborated multiple/extra shift depreciation in detail with graphics and illustrations. Unit of Production (UOP) Method of Depreciation has also been elaborated in details.

However, the draft GN is silent as to ICAI view with respect to determination of useful life in fractions or in round years whenever the date of purchase of an asset was not the 1 ^st day of the financial year of the company.

Download the draft Guidance Note Click Here >>