Accounting recording of exceptional depreciation
Posted: Tue Feb 11, 2025 10:14 am
First of all, it is important to remember that exceptional depreciation is a tax mechanism but not an accounting method. However, the latter must still appear in the professional's accounting. The first step will be to record the purchase of the property in question (when there is an acquisition).
Economic depreciation
Then, even if the company chooses to practice exceptional depreciation, it must still account for the classic depreciation of the asset over its actual useful life, which is called economic depreciation . In accounting, this teacher data depreciation represents the loss in value of the asset over time. It is accounted for normally, year after year, as if the company had not opted for the exceptional method.
Exceptional depreciation
Finally, exceptional depreciation must be seen as a tax advantage . It is a surplus of depreciation compared to the normal method. The latter must be recorded in a special account, that of exceptional depreciation. It will correspond to the "additional" part that the company can depreciate more quickly thanks to exceptional depreciation. It allows to immediately reduce the tax result , but not the accounting result.
What are other ways to dampen?
There are several types of depreciation: linear, declining balance , variable and exceptional. The first two techniques are the classic methods while the last two are rarer methods. Here is a summary table of the different methods compared to the exceptional method.
Economic depreciationThen, even if the company chooses to practice exceptional depreciation, it must still account for the classic depreciation of the asset over its actual useful life, which is called economic depreciation . In accounting, this teacher data depreciation represents the loss in value of the asset over time. It is accounted for normally, year after year, as if the company had not opted for the exceptional method.
Exceptional depreciationFinally, exceptional depreciation must be seen as a tax advantage . It is a surplus of depreciation compared to the normal method. The latter must be recorded in a special account, that of exceptional depreciation. It will correspond to the "additional" part that the company can depreciate more quickly thanks to exceptional depreciation. It allows to immediately reduce the tax result , but not the accounting result.
What are other ways to dampen?
There are several types of depreciation: linear, declining balance , variable and exceptional. The first two techniques are the classic methods while the last two are rarer methods. Here is a summary table of the different methods compared to the exceptional method.