Depreciate fixed assets

The depreciation of fixed assets consists of journalising the periodic depreciation amount during the depreciation period.

Description

You can depreciate an asset fiscally or commercially. You determine yourself whether to use both methods or one or the other. You determine this method once when you configure fixed assets.

  • Fiscal depreciation

    You depreciate in accordance with a method that is permitted fiscally and you journalise the depreciation in question.

  • Commercial depreciation

    You depreciate in accordance with an alternative method that provides you with a better view of the result from a cost accounting perspective.

The depreciation period depends on the chosen Depreciation method and the Asset type. Profit distributes the depreciations per year across the periods in the asset period table. A rounding takes place during the depreciation as set up in the asset group.

Accelerated depreciation

With fiscal depreciation, it is permitted in some cases to make extra depreciations on an asset over a number of years. This accelerated depreciation is on top of the normal depreciation and you divide the extra amount that you want to depreciate by the number of outstanding periods. Since you have a higher depreciation per period, the asset depreciates more quickly.Profit deletes all the superfluous periods.

Note:

Based on the 'Werken aan Winst' legislation, the following applies:

  • Goodwill may be depreciated in no fewer than 10 years. (The depreciation percentage is a maximum of 10% per year).
  • Business buildings may be depreciated up to the so-called bottom value.  

    The bottom value is 50% of the 'WOZ' value. Since the 'WOZ' value can differ per year, the bottom value for a building must be revised - if necessary - each year. You can change the bottom value of the asset on the fiscal depreciation tab.

  • Other assets - all assets that do not fall under goodwill or business buildings - may be depreciated in a minimum of 5 years. (The depreciation percentage is at most 20% per year on the purchase and use of plant and equipment).

    Temporary regulation for 2009, 2010 and 2011: Accelerated depreciation

  • Other assets (exceptions). You are allowed to depreciate the investments you make as an entrepreneur in 2 years whereby you may depreciate a maximum of 50% of the purchase or production costs in the investment year. You are allowed to depreciate the remainder in the subsequent years. Not all investments in plant and equipment are eligible for the temporary random depreciation. This accelerated depreciation is a temporary measure because of the economic crisis and applies to new plant and equipment. This measure was valid for investments made in 2009 and 2010 (commissioned before January 1st 2012 and before January 1st 2013 respectively) and has been extended by a year to include 2011. Thus, you can also make use of accelerated depreciation to fully depreciate investments that you make in 2011 in 2 years. For more information, refer to the website of the tax authority Random depreciation of plant and equipment (Vpb 2011).

If you have depreciated all the periods in a particular financial year, you can block the financial year in the financial period table. This closes the financial year for entries. If necessary, you can reopen the financial year by unblocking it.

Procedure

Also see