TMI BlogNotification for Amendment to Schedule IIX X X X Extracts X X X X X X X X Extracts X X X X ..... not be longer than the useful life specified in Part C and the residual value of an asset shall not be more than five per cent. of the original cost of the asset: Provided that where a company uses a useful life or residual value of the asset which is different from the above limits, justification for the difference shall be disclosed in its financial statement. (ii) For intangible assets, the provisions of the accounting standards applicable for the time being in force shall apply, except in case of intangible assets (Toll Roads) created under Build, Operate and Transfer , Build, Own, Operate and Transfer or any other form of public private partnership route in case of road projects. Amortisation in such cases may be done as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion period. (c) Example:- Cost of creation of Intangible Assets : ₹ 500/- Crores Total period of Agreement : 20 Years Time used for creation of Intangible Assets : 2 Years Intangible Assets to be amortised in : 18 Years Assuming that the Total revenue to be generated out of Intangible Assets over the period would be ₹ 600 Crores, in the following manner:- Year No. Revenue ( In Rs. Crores) Remarks Year 1 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i.e. ₹ 5/Rs. 600 x ₹ 500 Crores) which would be charged to profit and loss and 0.83% (i.e. ₹ 4.16 Crore/ ₹ 500 Crore x 100) is the amortisation rate for the first year. Where a company arrives at the amortisation amount in respect of the said Intangible Assets in accordance with any method as per the applicable Accounting Standards, it shall disclose the same. . (2) in Part C , in para 5, in item IV, in sub-item (i), for clause (b), the following clause shall be substituted, namely:- (b) continuous process plant for which no special rate has been prescribed under (ii) below [NESD] 25 years . (3) under the heading Notes , appearing after Part C , paragraph 5 shall be omitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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