Notes

Book Depreciation and Duty Depreciation in Brazilian - How to Have a Depreciation Deduction on Brazilian Tax Return - ATB - Accounting and Tax in Brazil
International Accounting Standard of sixteen (IAS 16) describes depreciation as the systematic allocation of the depreciable amount of an asset more than its useful life. Depreciable amount is the price of a good asset, or some other amount substituted for cost, less the residual value.
Ahead of Brazil adopted IFRS, companies in Brazil used to depreciate assets based on the useful lifetime table provided by simply the Department of Federal Revenue associated with Brazil, English intended for Secretaria da Receita Federal do Brasil.
Currently, big companies do not depreciate their assets established on Department involving Federal Revenue involving Brazil guidance any more. They depreciate these people based on the particular correct useful life? the time over which in turn an asset is definitely expected to become available for use simply by an entity or even the number involving production or similar units expected to be able to be obtained from the asset by the entity? which can be various from the duty table and different in one company in order to another.
Since the devaluation expense account within the Financial Claims has a distinct balance from the depreciation expense regarding to the duty table, companies have two options:
1) Adjust the income tax calculation established on the taxes desk
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This can cause a variation between financial sales and tax data processing that will end result in a deferred tax asset or liability.
2) Confirmation for tax specialists that the useful life chosen by the company is usually the correct one particular.
In this circumstance, as the monetary accounting and taxes accounting will end up being the same, right now there is no deferred tax liability.
Right now there are small organizations that still depreciate assets based on Office of Federal Earnings of Brazil direction because it is the most effective way. But it is not the right way to account intended for depreciation and this kind of will negatively effect the financial statement.
The main helpful lives for taxes depreciation
Building? 25 years
Office Furniture? twelve years
Computers? 5 years
Cars? 5 various years
Fixtures? twelve years
See Community law IN 1 ) 700/2017 for the useful life desk:
In some situations typically the Department of Federal Revenue of South america provides for the instant expense of resources up to a new specific amount.
That is fundamental that the business includes a good internal charge of fixed assets in order to estimate what can be the correct useful life for every single asset class. This may impact typically the taxes and will certainly impact the financial statemen

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