In order to avoid the confusion among stakeholders and to bring consistency in its recent regulation, the Corporate Affairs Ministry has made changes in the depreciation schedule under the new company law.
The ministry has notified that there will not be two classes of companies for depreciation purposes as was indicated in the new company law schedule. Clearing air on depreciation schedule for firms, the Corporate Affairs Ministry noted that all companies need to follow the ‘useful life’ mentioned for various tangible assets in the depreciation schedule whereas the residual value of an asset cannot exceed 5 percent. Further, companies need to disclose the justification in their financial statement if they deviate from these norms.
Regarding the continuous process plants, the Corporate Affairs Ministry has changed the useful life of continuous process plants to 25 years from 8 years specified in the depreciation schedule under the new law which is likely to boost the net profits of companies in industries, such as cement and chemicals. Furthermore, the Ministry has restored revenue-based amortisation for toll roads built under public-private partnerships and has clarified that amortisation of intangible assets must be in accordance with the applicable accounting standards.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: