Property, plant and equipment and CWIP ageing under Schedule III: the reconciliation and schedules

Since the 2021 amendment to Schedule III, the fixed asset note has three more pieces: a title deeds table, a registered valuer statement, and the CWIP ageing schedule with its completion schedule. This guide covers what Division I (non-Ind AS) actually requires for property, plant and equipment and capital work-in-progress, shows each format with illustrative figures, works one example end to end, and ends with the tie-outs worth checking before you sign. For the rest of the format, see our Schedule III guide.

PPE disclosure under Schedule III: where it sits

On the face of the balance sheet, Division I shows a single non-current line, "Property, Plant and Equipment and Intangible assets", with four sub-items: (i) Property, Plant and Equipment, (ii) Intangible assets, (iii) Capital work-in-progress and (iv) Intangible assets under development. G.S.R. 207(E) replaced the old wording "Tangible Assets" with "Property, Plant and Equipment" from 1 April 2021.

The note (heading I of the general instructions for the balance sheet) requires:

• Classification into (a) Land, (b) Buildings, (c) Plant and Equipment, (d) Furniture and Fixtures, (e) Vehicles, (f) Office equipment and (g) Others (specify nature).
• Assets under lease specified separately under each class. ICAI's Guidance Note on Division I reads "under lease" as assets given on operating lease (for a lessor) and assets held under finance lease (for a lessee), and says leasehold improvements, leasehold land and freehold land should each be shown as separate classes.
• A reconciliation of gross and net carrying amounts for each class — covered next.
• Revaluation or reduction notes: where amounts have been written off on a reduction of capital or revaluation, or added on revaluation, every later balance sheet shows the revised figures and, for the first five years, a note of the amount and its date.

Capital advances do not belong in CWIP. The Guidance Note is explicit that they go under long-term loans and advances, which in practice is where a supplier advance for machinery should be mapped. Where they sit on the balance sheet depends on the same tests discussed in current and non-current classification under Schedule III.

The reconciliation of gross and net carrying amounts

Item (iii) under heading I requires, for each class of assets, a reconciliation of gross and net carrying amounts at the beginning and end of the period showing additions, disposals, acquisitions through business combinations, the amount of change due to revaluation (if the change is 10% or more in the aggregate of the net carrying value of each class) and other adjustments, with the related depreciation and impairment losses or reversals shown separately.

The Guidance Note fills in three points. Acquisitions through business combinations — read as an amalgamation, acquisition or other restructuring of a set of assets constituting a business — are shown separately for each class. "Other adjustments" covers items such as exchange differences capitalised under AS 11 and borrowing costs capitalised under AS 16. And depreciation for each class is shown as opening accumulated depreciation, depreciation for the period, deductions or other adjustments, and closing accumulated depreciation, with similar columns for impairment where relevant.

A worked example for a manufacturing company at 31 March 2026 (₹ lakh; the business combination, revaluation and impairment columns are left out because they are nil here, but keep them in the template):

The same table is needed for the previous year, since comparatives follow the current-year format. Then tie it out:

• Depreciation of 36.2 agrees with "Depreciation and amortisation expense" in the statement of profit and loss, after adding amortisation of any intangibles.
• Disposals: written-down value disposed is 4.0 + 2.0 + 0.1 = 6.1. If the sale proceeds were 7.0, the profit of 0.9 should appear in other income, and the proceeds in investing cash flows.
• Additions of 82.0 include anything capitalised out of CWIP during the year. Opening CWIP plus the year's spend, less amounts capitalised, should equal closing CWIP.
• Net 399.7 agrees with the face of the balance sheet and with the fixed asset ledgers in the trial balance.

Revaluation: the 10% rule and the registered valuer

Schedule III asks for the revaluation change to be shown separately where it is 10% or more of the aggregate net carrying value of the class. The Guidance Note points out that AS 10 (Revised) requires the reconciliation to show revaluation increases and decreases whatever their size, so it recommends presenting the revaluation change separately even below 10%, and doing so consistently. It also lists the AS 10 revaluation disclosures — effective date, whether an independent valuer was involved, methods and significant assumptions, and the revaluation surplus with its movement — and notes that AS 26 does not permit revaluation of intangible assets.

Additional regulatory information item (ii) adds one more line: where the company has revalued its PPE, it must disclose whether the revaluation is based on a valuation by a registered valuer as defined in rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017. The Guidance Note adds that if a registered valuer was not used, that fact is disclosed. A one-line note is enough. As a separate illustration (not the company in the worked example above), if freehold land carried at ₹80.0 lakh had been revalued:

On the audit side, where CARO 2020 applies, clause 3(i)(d) asks the same questions — whether PPE (including right-of-use assets) or intangible assets were revalued, whether by a registered valuer, and the amount of change if 10% or more of a class. The note and the CARO answer should match; our article on CARO 2020 clauses that are easy to get wrong covers the related clause 3(i)(c) title deeds answer.

The title deeds table

Additional regulatory information item (i) requires details of all immovable property whose title deeds are not held in the company's name, other than property where the company is the lessee and the lease agreement is duly executed in its favour. Jointly held property is reported to the extent of the company's share. The format, with an illustrative row:

The prescribed rows are PPE (land, building), investment property (land, building), PPE retired from active use and held for disposal (land, building), and others. The Guidance Note's points are practical: title deeds mean the registered sale, transfer or conveyance deed; for a leased property they mean the lease agreement, so a lessee whose lease is not duly executed must disclose it; immovable property held as inventory by a real estate company is outside the scope; where the exact date is unknown, give the month and year; and where the reason is a dispute, state its nature. In Division I, investment property sits within non-current investments, so do not forget land or buildings held there. Where every title deed is in the company's name, a nil statement keeps the note complete. Where CARO 2020 applies, clause 3(i)(c) asks for the same information in the auditor's report.

The CWIP ageing schedule

Item (iv)(a) of the additional regulatory information prescribes the capital work-in-progress ageing schedule under Schedule III: two rows — projects in progress and projects temporarily suspended — and four buckets: less than 1 year, 1–2 years, 2–3 years and more than 3 years. The total must tally with the CWIP amount in the balance sheet.

The Guidance Note explains how to age it. The schedule need not be given project by project, but each amount is aged from the date of its initial recognition in CWIP to the balance sheet date — so a single project can fall across several buckets. A temporary suspension that is a necessary part of getting the asset ready (curing, say) does not make a project "temporarily suspended". Status is judged at the reporting date: a project suspended for most of the year but resumed before 31 March is "in progress", and a later change does not alter the previous year's comparative. The same applies to investment property under development.

Worked example. CWIP of ₹62.0 lakh at 31 March 2026 is made up of:

• Project A, a new shed: ₹18.0 lakh spent from August 2025, on schedule.
• Project B, a machinery line: ₹10.0 lakh in June 2023, ₹20.0 lakh in September 2024, ₹8.0 lakh in January 2026. The original plan was completion by March 2025 at ₹32.0 lakh.
• Project C, a warehouse: ₹6.0 lakh spent in February 2022, originally due for completion by March 2023; work suspended since October 2024 pending a boundary dispute.

Project B's June 2023 spend is 2 years 9 months old, so it sits in 2–3 years; the September 2024 spend in 1–2 years; the January 2026 spend, with Project A, in less than 1 year. The CWIP register therefore needs dates for each amount, not just a running balance per project.

The completion schedule, and intangible assets under development

Item (iv)(b) adds a CWIP completion schedule for projects whose completion is overdue or whose cost has exceeded the original plan, with columns "to be completed in" less than 1 year, 1–2 years, 2–3 years and more than 3 years, and details of suspended projects given separately. The Guidance Note's points: the comparison is with the original plan approved by the relevant authority, not with later revisions; the schedule is given only where cost or time has already been exceeded at the reporting date; it is given project by project, separately for projects in progress and suspended projects, though immaterial projects can be aggregated; and a "project" is the smallest group of assets with a common intended use. Schedule III heads the table "Amount in Rs." but does not say which amount goes in the cells; showing each project's CWIP balance under its expected completion column, as below, follows the Guidance Note's modified format and is the usual way to present it.

Project A is on time and within budget, so it does not appear. Item (v) prescribes the same two schedules for intangible assets under development, and the Guidance Note applies the CWIP guidance to them; they can only be carried under this head if they meet the recognition criteria in AS 26. In practice, the ageing is also a useful test of the CWIP ledger itself: old amounts with no live project behind them are often payments that should have been capitalised, expensed or reclassified as advances.

AS 10, section 123 and Schedule II: the depreciation link

The note is only as reliable as the depreciation working behind it. In brief:

• AS 10 (Revised 2016) governs recognition, cost, subsequent expenditure, revaluation, depreciation and derecognition of PPE, and the Guidance Note maps both PPE and CWIP to it. Its disclosures apply in addition to Schedule III.
• Schedule II (read with section 123) sets the useful lives in Part C. Useful life should not ordinarily differ from Part C, and residual value should not exceed 5% of original cost; if either differs, the financial statements disclose the difference with a justification supported by technical advice.
• Where a significant part of an asset has a different useful life, that part is depreciated separately (component accounting: Schedule II, note 4, mandatory for financial years commencing on or after 1 April 2015, and also required by AS 10). Additions and disposals are depreciated pro rata. The accounts disclose the depreciation methods used, and the useful lives where they differ from the Schedule.
• Tax depreciation on block of assets is a separate computation for the return. For FY 2025-26 it is under the Income-tax Act, 1961; it does not belong in the books.

A common slip in small-company files is the reverse: the depreciation in the books is the income-tax figure, with no Schedule II working at all. Settle that before the note is drafted; for other slips that recur in small-company files, see our list of Schedule III mistakes in small company accounts.

Checks before signing

Most take minutes once the fixed asset and CWIP registers are dated and complete; where the client keeps neither, that is the first query to send. For where this note sits in the full set, see the notes to accounts format under Schedule III.

Frequently asked questions

Sources

• Companies Act, 2013 — Schedule III Division I and Schedule II (India Code, as amended)
• Schedule III amendment — G.S.R. 207(E), 24 March 2021 (Gazette)
• ICAI — Guidance Note on Division I – Non Ind AS Schedule III to the Companies Act, 2013 (Revised January 2022)
• ICAI — Guidance Note on CARO 2020 (Revised 2022 Edition), clause 3(i)
• AS 10 (Revised 2016) Property, Plant and Equipment — Companies (Accounting Standards) Rules, 2021

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