Proportional Accelerated Depreciation

The accelerated depreciation regards the accelerated decrease of the value of a company's assets, resulting from nature's actions of these assets due to the operational use superior to the regular.

In accordance with RIR/99, the accelerated depreciation is recognized and registered in accounting terms, regarding the accelerated decrease of the value of assets, resulting from nature's actions due to the operation regime superior than normal, calculated based on the number of daily operation hours and to which the tax legislation equally follows its deduction.

As to what concerns the assets, the following accelerated depreciation coefficient on the rates usually usable may be adopted, due to the number of daily hours of operation (RIR/1999, art. 312):

a) 1.0 - for an 8-hour operation shift

b) 1.5 - for two 8-hour operation shifts

c) 2.0 - for three 8-hour operation shifts

In these conditions, an asset, whose regular depreciation rate is 10% per annum, may be depreciated in 15% per annum if it operates 16 hours a day or 20% per annum operating 24 hours a day.

To calculate and account the accumulated depreciation, the company does not need a prior authorization of proper authority. However, when a company uses this resource, the authority reserves the right to request, at any time, rendering of accounts, in which the taxpayer must offer a convincing evidence justifying the use of the accelerated depreciation, under penalty of annulling the excessive use, therefore charging the rates with all applicable increases.

With this routine, the company may use the asset in a certain period of the month, applying a specific rate of 15% (asset operating for 16 hours), which will correspond to the accelerated depreciation, justified by the excess of use of this period and for the rest of the month, it will use the regular depreciation rate of 10%, calculated by the monthly Calculation routine.

The accelerated depreciation may only be executed within the month when the next depreciation will be calculated. The system uses the database as a reference to both register both the accelerated depreciation movement and update the account balances.

On the last day of the month, the user generates the calculation corresponding to the monthly depreciation by the routine of the Monthly Calculation. If in this period the accelerated depreciation is calculated for some assets, this value will be subtracted from the total amount of depreciation to obtain the amount of accounting depreciation of the month.

At the accounting, the accelerated depreciation uses the standardize entry 840.

  
Example:

If we consider that the equipment was used during the month, in two eight-hour shifts, during five days and its regular depreciation rate is 10%, by the routine, the system calculates the accelerated depreciation for 15% rate only for 5 days of the month. For the other days, the 10% rate will be used and the calculation will be made in the end of the month.

Procedures

Calculating the accelerated depreciation: