SCH-02 - SCHEDULE II -See section 123

Depreciation rules u/s 123: standard useful lives, 5% residual value cap, component accounting, toll road amortisation

Prescribes the framework for computing depreciation under section 123 by defining depreciation (including amortisation), depreciable amount, residual value and useful life, and by specifying standard useful lives for tangible asset classes in Part C; companies must generally follow these lives and a residual value cap of 5% of original cost, and must disclose and justify any departure supported by technical advice, affecting the depreciation charge and related financial statement disclosures. Requires intangible assets to be accounted for under applicable Ind AS or other notified accounting standards, with a revenue-based amortisation method mandated for toll road intangible assets under PPP concession arrangements, ensuring full amortisation over the concession period. Overrides the Schedule where a notified useful life/residual value applies for specific assets. Provides pro rata depreciation on additions/disposals, component-wise useful life for significant parts (mandatory from FY commencing 1 April 2015), extra-shift depreciation rules (except NESD items), and transitional treatment for existing carrying amounts, including possible adjustment to opening retained earnings where remaining useful life is nil.