What are the exceptional depreciation?

The exceptional depreciation is a tax depreciation defined by the CGI, ie the General Tax Code. It must imperatively be accounted for . Here is some information about what these depreciations are, and how to account for them.

What is Exceptional Depreciation?

Exceptional depreciation is a tax depreciation. The General Tax Code defines the latter, which favors companies or even acquires certain assets. Generally, exceptional depreciation is provisional and clearly defined by dates. The investments concerned are rare and reduced over time: for example, to noise reduction materials for energy savings are considered a damping outstanding until 1 st January 2011. The only exception to this rule is limited to the Acquisition of software. Nevertheless, it is imperative to integrate the latter in the accounting of the company in the following way.

How to account for exceptional depreciation?

It is imperative to recognize the exceptional depreciation in the same way as a declining balance . You should be aware that the law provides for four different types of exceptional depreciation, only two of which need to be accounted for. When a company benefits from exceptional tax depreciation, it is obliged to make two accounting records. First, an amortization linked to the economic endowment must be recognized , and then we must think of the surplus depreciation which corresponds to the exceptional depreciation recorded as an exceptional depreciation.

 The exceptional depreciation is therefore limited and, as the name indicates, quite exceptional, only concerning some extremely precise cases enumerated precisely by the General Tax Code. If the company is concerned, it is imperative to make it appear in the accounts to comply with the law currently in force.