Depreciation as per companies act 2013 for - energy sector

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Under Companies Act 2013, depreciation is based on useful life of assets. If actual useful life differs from Schedule II, companies can use justified useful life based on technical evaluation.

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2014 Dear All,

I have a query regarding the depreciation rates as per Companies Act 2013 as follows.

1. Under the heading Plant & Machinery point b(VI)there is no specific rate mentioned for Solar power plant. So which rates should be considered?

2. If we consider the rate mentioned in point a(i) other than continuous process plant it is 6.33% and plant life assumed is 15 yrs whereas the actual life of solar power plant in 25 yrs.

3. The plant life assumed by the Companies Act 2013 is different from the actual life given by manufacturer as given below.

a. Solar - As per Co. Act: 15 yrs
As per Mfg : 25 yrs

b. Wind - As per Co. Act : 22 yrs
As per Mfg : 20 yrs

c. Hydro - As per Co. Act : 40 yrs
As per Mfg : 35 yrs

So can we consider the depreciation rates as per the Companies Act 2013 given the difference in the plant life?

Regards

Vaibhav Suryavanshi

Vishnu Saboo

Vishnu Saboo (Expert)

27 September 2014 as per new act depreciation on FA will be based on useful life.
so i believe you need to consider acceptable useful file for depreciation purpose

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