Depreciation planning for audit readiness under Schedule II

Decide policy on paper before clicking Calculate

List each FAR category → Companies Act useful life → method (SLM/WDV) → residual. Note residual value practice and whether component accounting applies to any major plant. If tax WDV blocks differ, maintain them as a parallel register — do not blend rates into one column.

• Bring last year’s depreciation working for comparison
• Flag assets with zero WDV still in use
• Flag CWIP / capital advances — usually not depreciated until capitalised
• Get CA sign-off on the category→life mapping table

Opening balances — import columns that matter

For migration, finance must supply Gross Block (cost), Accumulated Depreciation, and Written Down Value that tie to the trial balance. If only cost is imported, FAR cannot invent correct accum. dep. Preview depreciation on a sample after import; variance vs last year Excel should be explainable (life change, missing disposal, etc.).

• Reconcile category totals to TB before go-live
• Investigate > material variance immediately — do not “adjust in month 3”
• Put migration reconciliation PDF in the audit file

During the year — avoid the March fire drill

Capitalise additions in FAR when capitalised in books (same date logic). Record disposals/transfers when they happen. Mid-year additions and sub-100-day style rules are handled in-engine when policy is set — but only if purchase/put-to-use dates are correct in the asset master.

• Monthly: additions & disposals listing review (15 minutes)
• Quarterly: run depreciation preview; spot-check 10 assets
• Never backdate dozens of edits the week before audit without a change log note

Audit week pack (export these)

Category-wise depreciation for the period, asset-wise register with WDV, additions/disposals, verification exceptions still open, and user amendment log if requested. Walk the auditor through FAR live for sampling — show asset → history → verification status → documents.

• Prepare a one-page bridge: FAR closing WDV ↔ financial statements
• Keep Income Tax workings in a separately named export
• If Schedule II presentation differs from FAR category names, maintain a mapping sheet