Based on the acquisition or production cost of an asset
Depreciation is based on the acquisition or production cost of an
asset. In general, the straight-line and units-of-production meth-
ods can be used. The declining balance method is applicable
only for fixed assets acquired or produced after December 31
2008 and before January 1 2011.
A taxpayer may change from the declining-balance to the
straight-line method, but not vice versa. Except for buildings,
depreciation rates are not fxed by statute; however, the Federal
Ministry of Finance publishes guidelines on useful asset lives in
officially recommended tables.
A write-down to a lower going-concern value to refect technical
or economic obsolescence is possible for tax purposes.
Inventories must be valued at cost. However, write-downs to
lower market prices are possible. For essentially similar goods,
a weighted average is allowed. The German Income Tax Law
(Einkommensteuergesetz – EStG) explicitly permits the use of
the last-in-first-out method (LIFO) if this is in accordance with
generally accepted accounting principles.
EU Forecast
euf:ba18f:197/nws-01