Component Accounting under Companies Act 2013: A Practical Guide for Manufacturers
How to identify significant components, depreciate them separately under Schedule II, and handle AS 10 component replacements without double-counting.
Schedule II requires that where the cost of a significant part of an asset has a useful life different from the asset as a whole, that part is depreciated separately. For manufacturers with large plant, this component accounting isn't optional — and it's hard to do in a flat register.
Identifying significant components
A component is significant if its cost is material relative to the whole asset and its useful life differs meaningfully. Think of a furnace lining that's replaced every few years within a plant that lasts decades, or a turbine within a power unit. Each such component depreciates on its own life.
The double-counting trap
The moment you split an asset into components, you have to make sure the parent isn't also carrying and depreciating the same cost. AssetOS models a parent 'shell' that carries no cost, with child components that hold the cost and life — and the shell is excluded from both the Companies Act and Income-tax engines, so nothing double-counts.
AS 10 replacements
AssetOS handles the full component lifecycle: threshold-based split suggestions, shell-and-component modelling, and AS 10 replacements routed through maker–checker approval so every entry is reviewed.