Useful Life of Plant & Machinery as per Companies Act

Useful Life of Plant & Machinery as per Companies Act

The new amendment in Companies Act, 1956 emphasises on the concept of useful life of assets by providing indicative life and residual value for assets in Schedule II.

The Corporate Affairs Ministry has now said that useful lives of assets and the residual value specified in Schedule II should be ordinarily used by companies. In case, companies are using values that are different from the Schedule II, then they would be required to adequate disclosures in their financial statements to justify the variation along with technical advice.

A Chartered Engineer & Valuer prepares his impartial report to assess the residual useful life on the basis of the physical condition of the assets. Following documentary evidence needs to be furnished at the time of Inspection:-

1. Copy of audited balance sheet of last three consecutive years
2. Copy of Fixed Asset Register ( FAR ) indicting list of P & M
3. Copy of Purchase Invoice of the Machineries
4. Production schedule of the Plant
5. Breakdown and Preventive Maintenance Records of the machines

NAVEEN ARORA Chartered Engineer & Approved Valuer ( P&M) ( Customs & MNRE Empanelled ) CERTIFICATION / VALUATIONS RESPECT OF :BOM & Purchase Order verification for Solar Power Developers Appendix-32A and Installation Certificates under EPCG Scheme. Status Holder Incentive Scheme (SHIS) & Advance License. Import of Plant & Machinery for 100% EOU. Certification for import of Second Hand Plants, Machinery and Spares . Import into SEZ. Export of defective parts/equipment . NOC from Ministry of Environment and Forest (MOEF). Cold Chain Subsidy.