One asset, several books: how FixedAsset Pro keeps Companies Act, Income-tax and other depreciation side by side

Why one asset needs more than one depreciation figure

Every Indian company depreciates its assets at least twice. The Companies Act book follows Schedule II: each asset is depreciated over its useful life, with the straight-line or written-down value method, from the date it is available for use. The Income-tax book follows section 32 of the Income-tax Act, 1961 (for tax year 2026-27 onwards, the corresponding provisions of the Income-tax Act, 2025): assets are pooled into blocks, depreciated at prescribed rates on the written-down value of the block, with the half rate for assets put to use for less than 180 days.

The two figures never match, and they are not supposed to. The difference feeds the deferred tax calculation and, where a tax audit applies, clause 18 of Form 3CD. A subsidiary of a foreign group may need a third figure for the parent's reporting, and management may want a fourth for internal decisions.

A spreadsheet handles this with parallel columns, which drift apart as soon as one is edited and the other is not. FixedAsset Pro handles it with books: separate depreciation calculations on the same asset record, each with its own rules. This article explains how they work. For the accounting background, see the book vs tax reconciliation guide.

The books you get out of the box

Two books are set up from the start.

Companies Act book. Each asset is depreciated individually under Schedule II. Useful lives from Part C ship as reference data, and you choose SLM or WDV per category or per asset. The WDV rate is derived from the useful life and residual value. Depreciation is pro-rata by day from the put-to-use date. The residual value is capped at 5% of cost unless you record a justification for a different figure, which matches Schedule II's requirement to disclose and justify any departure. Extra-shift and component depreciation are applied by policy.

Income-tax book. Assets belong to blocks of assets. Each block runs opening written-down value plus additions less sale proceeds, with the half rate for assets used for less than 180 days, additional depreciation under section 32(1)(iia) where eligible and the section 115BAA regime respected, and the section 50 effect when a block ends. The block, not the individual asset, is the unit of computation, as the law requires.

Both books sit on the same asset. When you record an addition, a disposal or a transfer, each book picks it up under its own rules. You do not enter anything twice.

Adding more books

You can add further books when you need them:

• Ind AS or IFRS books, for example where a subsidiary reports to a parent on a different basis
• Management books, for internal costing or planning with different lives
• Custom books, with custom methods such as percentage tables

Each book has its own policy. The policy settings include the month rule (how part months are counted where a book uses months), a low-value write-off threshold, an end-of-life true-up, and whether the disposal day is depreciated. The statutory defaults are reference data: agree them with your auditor before the first run. The application records the justification for every override.

One corporate book is designated as the book that posts to the general ledger. The other books are calculated and reported, but do not post.

Running depreciation for a book

Depreciation runs per book and per period: a full year, a quarter or a month, on your fiscal calendar (April to March by default). A run goes through the same steps whatever the book:

1. Validate. The run lists missing or inconsistent inputs, such as an asset with no put-to-use date or no useful life, before any figure is produced.
2. Preview. For each asset, the opening value, additions, disposals, depreciation for the period and the closing value.
3. Explain. Open any line to see how its figure was worked out: the inputs, the method, the rate, the days counted and the rounding.
4. Submit and post. The run goes through approval and is posted, and the depreciation journal goes to the ledger through the account mapping.
5. Reverse or reproduce. A posted run can be reversed as its own transaction, and any historical run can be reproduced from the policy snapshot taken when it was run.

You can also compare a run with the previous one, line by line, to see what changed.

Changes do not rewrite the past

Estimates change. A machine turns out to have a shorter life than expected; a cost is adjusted after a supplier credit note. In FixedAsset Pro, a change of estimate, a cost adjustment, a pause and resume, or a held-for-sale classification is a recorded event that takes effect from the next period. Earlier periods are not recalculated or silently changed. That matches how Ind AS 8 and AS 5 treat changes in estimates, and it means that a posted run still explains itself a year later.

The reports that use more than one book

Several reports exist precisely because there are two or more books:

• The Companies Act vs Income-tax comparison, asset by asset and in total
• The deferred tax working on the difference
• The block-wise section 32 schedule with the 180-day split
• Form 3CD clause 18 figures, block by block
• The depreciation register and summary, and the Schedule III fixed asset schedule, from the Companies Act book

All of these come from the report centre and export to PDF, Excel, CSV or Word.

Starting with opening balances

Most companies move to FixedAsset Pro mid-life, with years of depreciation already behind each asset. The import brings in opening balances for both books, through a dry run that checks every row and an all-or-nothing commit, so the cut-over figures tie to your audited Schedule III totals and to the closing written-down value of each tax block. The Excel migration guide covers the preparation.

What is available where

In the web edition, both statutory books and additional books are available with validate, preview, explain, posting, reversal, reproduction and period close.

In the desktop edition, both statutory books are available with preview and explain per asset. Posting runs and period close are planned for the desktop edition; the product roadmap shows the current status.

Journals can be exported or sent to an ERP target, and a trial balance can be imported for reconciliation; see integrations for what exists today. FixedAsset Pro never creates ledgers in your accounting system.

Try it with your own figures

You can check single assets with the free Schedule II calculator and Income-tax depreciation calculator. To see both books running on your own register, book a demo or create an account. Feature details are on the Depreciation and Financial Management pages.

Schedule II lives, Income-tax rates and thresholds ship as reference data, not advice. Agree your depreciation policies with your auditor and tax adviser before the first run.