Depreciation rates in Companies Act,1956

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CA Dron Bharadwaj (Querist)
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05 January 2010 Depreciation rates given in schedule xiv of the Companies Act,1956 are minimum or absolute ?

Can a company depreciate the assets at a rate higher than those specified in the above mentioned schedule ?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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05 January 2010 The rates contained in schedule XIV should be viewed as the minimum rates. However, if on the basis of bona fide technological evaluation,higher rates of depreciation are justified, they may be provided with proper disclosure by way of note forming part of annual accounts.

Ref:- 1)Circular no 2 of 1989 dated 07/3/1989.
2)Note no 5(ii) to schedule XIV.

In view of the above Schedule XIV rates are not mandatory.