18.10 - Depreciation under Companies Act, 2013 (India)
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Practice Questions
Test your understanding with targeted questions
What is depreciation according to the Companies Act, 2013?
💡 Hint: Think about what happens to the value of an asset over time.
Why is component accounting necessary?
💡 Hint: Consider the different life spans of components in machinery.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does the Companies Act, 2013 specify regarding depreciation?
💡 Hint: Refer to Schedule II of the Act.
True or False: Companies can adopt different useful lives for their assets under the Companies Act, but must justify their choices.
💡 Hint: Think about why flexibility is important in financial reporting.
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Challenge Problems
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Imagine a company that owns a factory with various machines, each made of multiple parts. One machine has a motor, conveyor, and body, with differing lifespans. Analyze how the company should account for depreciation under component accounting.
💡 Hint: Consider how the different parts wear out.
A company decides to change the useful life of an asset from 10 to 15 years based on new justified calculations. Discuss the impact this might have on their financial reporting.
💡 Hint: How will this change affect the company's cash flows?
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