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Expert services for identification, grouping, and break-up of assets based on elements with materially different useful lives—ensuring compliance with Companies Act 2013 and IFRS requirements.
Companies Act
Compliant
Projects Done
Component Approach
For PP&E Accounting
MAIN ASSET
Manufacturing Plant
Civil
30 yrs
Machinery
15 yrs
Electrical
10 yrs
Different useful lives = Separate components
Sch II Compliant
Companies Act 2013
Asset componentisation is the process of breaking down a single asset into its constituent components when those components have materially different estimated useful lives.
This "component approach" in accounting for Property, Plant and Equipment (PP&E) is mandated by Companies Act 2013 (Schedule II) and International Financial Reporting Standards (IFRS/IND AS).
Key Principle
Each part of an item of PP&E with a cost that is significant in relation to the total cost must be depreciated separately based on its own useful life.
Identify individual assets and their sub-components
Group assets by locations and categories
Break-up based on different useful lives
Apply appropriate depreciation rates
Beyond regulatory compliance, componentisation brings significant operational and financial benefits to your organization.
Full compliance with Companies Act 2013 (Schedule II) and IFRS/IND AS requirements for component accounting.
More reflective depreciation accounting based on actual useful lives of individual components.
Enhanced Fixed Asset Register with detailed component-level tracking and management.
Optimize depreciation claims and tax benefits through proper component-wise useful life allocation.
Better maintenance and replacement planning based on component-level life cycle data.
Clear financial statements with accurate book values reflecting true asset composition.
Our componentisation services cover a wide range of asset categories across industries.
Manufacturing & Processing
Comprehensive componentisation of plant assets including machinery, equipment, and production facilities.
Buildings & Infrastructure
Complete PP&E componentisation covering buildings, civil structures, and infrastructure assets.
A systematic approach to ensure accurate and compliant asset componentisation.
Gather existing FAR, invoices, and technical documentation
On-site inspection and identification of asset components
Break-up assets into components with different useful lives
Allocate costs to individual components
Detailed report and updated Fixed Asset Register
Our componentisation services ensure full compliance with applicable accounting standards and regulatory requirements.
Companies Act 2013
Schedule II mandates component-wise depreciation for assets with different useful lives
IFRS / IND AS 16
International standards requiring component accounting for PP&E
AS 10 (Revised)
Indian Accounting Standard for Property, Plant and Equipment
Audit-ready documentation
Comprehensive documentation to support your accounting and compliance requirements.
Complete Fixed Asset Register with component-level details
Comprehensive report with methodology and findings
Component-wise depreciation calculation sheets
Professional certification for audit and compliance
Any organization with significant PP&E can benefit from proper asset componentisation.
Manufacturing
Power & Energy
Real Estate
Oil & Gas
Healthcare
Infrastructure
Get professional asset componentisation services to ensure regulatory compliance, improve your FAR, and optimize depreciation accounting.