Schedule II Depreciation
Schedule II of the Companies Act, 2013 prescribes depreciation based on the useful life of an asset rather than a fixed percentage rate, and governs how Indian companies depreciate assets in their financial statements.
Before Schedule II, Indian companies depreciated assets under Schedule XIV of the Companies Act, 1956, which prescribed fixed rates. Schedule II shifted the basis to useful life: each asset class has an indicative useful life, and a company depreciates the asset's cost (less residual value, capped at 5%) over that life.
Schedule II also introduced component accounting — where a significant part of an asset has a materially different useful life from the asset as a whole, that part is depreciated separately.
How AssetIQ helps
AssetIQ's Depreciation & Compliance Agent computes Schedule II depreciation automatically for every asset and legal entity, including component accounting, and drafts the journal entries for a human to review.
See the Depreciation & Compliance Agent →