Summary
Exceptional depreciation is a tax mechanism which allows a fixed asset to be depreciated in an accelerated manner;
This method makes it possible to reduce the company's taxable base ;
Accelerated depreciable assets are granted by temporary exemptions ;
The two steps for recording exceptional depreciation are: economic teacher data then exceptional depreciation .
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What is exceptional depreciation?Definition
As a reminder, the depreciation of an asset consists of spreading its acquisition cost over several years, depending on its expected useful life. Like variable depreciation , the exceptional method is an occasional process.
Exceptional depreciation is a purely fiscal mechanism that allows companies to deduct the value of an asset more quickly, thanks to an accelerated depreciation process . It is also called derogatory or accelerated depreciation. This method does not work like the others, which are reflected in accounting. It is a temporary exemption depending on the nature of the asset, the activity, etc.
The aim of exceptional depreciation: to encourage companies to invest.
Use
The main advantage of exceptional depreciation is that the company will reduce the amount of taxable income and therefore pay less corporate or income tax during an accounting year. It is the company that decides whether or not to apply this system. It is always optional.
Depending on the nature of the object of the fixed asset, the duration of the exceptional depreciation can be considerably shortened, often to 12 months (1 year) or 24 months (2 years). Its calculation will therefore be much on a shorter time frame than a classic depreciation. A certain percentage of the cost price of the asset can also be reduced.
Fixed assets affected by exceptional depreciation
The General Tax Code provides for the cases of use of this method. The existing systems are often temporary, regularly updated by the administration and concern specific assets. The last fixed assets eligible for exceptional depreciation are:
Industrial robots and 3D printers;
Investments in innovative SMEs;
Software or websites (deleted since 2017);
The commercial fund.
Here are some concrete examples of the latest goods eligible in the exceptional manner, depending on their purpose.
