IAS 16 (EU-endorsed) / PCG (Plan Comptable Général)

Depreciation Calculator
France

IAS 16 depreciation calculator with France-specific regulatory context, Autorité des Marchés Financiers (AMF) / Haut Conseil du Commissariat aux Comptes (H3C) expectations, and local tax vs accounting depreciation guidance.

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IAS 16 Depreciation Audit Working Paper Template — free PDF

Practical audit guide covering all four depreciation methods with worked examples, component depreciation checklist, change-in-estimate documentation template, and useful life benchmarks by asset class.

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IAS 16 Depreciation in France — IAS 16 (EU-endorsed) / PCG (Plan Comptable Général)

France applies IAS 16 through EU endorsement for listed companies preparing consolidated financial statements. Non-listed French entities follow the Plan Comptable Général (PCG), which has been progressively aligned with IAS 16 principles since the 2005 reform. The French approach to depreciation has historically been more prescriptive than IAS 16, with detailed regulatory guidance on useful lives and methods. The PCG recognises both depreciation (amortissement pour dépréciation) and impairment (dépréciation), following a logic broadly similar to IAS 16 and IAS 36.

Regulatory Context — Autorité des Marchés Financiers (AMF) / Haut Conseil du Commissariat aux Comptes (H3C)

The AMF (Autorité des Marchés Financiers) supervises financial reporting by listed companies and has included PP&E depreciation in its annual recommendations on financial statements. Key AMF observations include: the importance of entity-specific useful life estimates (not standardised fiscal rates), the mandatory application of component depreciation (approche par composants) for significant assets, and the need for clear disclosure of the judgments underlying depreciation estimates. The H3C (Haut Conseil du Commissariat aux Comptes) audit quality inspection programme has also focused on the audit of depreciation estimates.

Practical Guidance for France

France has a well-established system of component depreciation (approche par composants) that predates the international adoption of IAS 16. The CRC 2002-10 regulation (now incorporated into PCG) mandated component depreciation for French GAAP from 2005 onwards. For buildings, the Conseil National de la Comptabilité published detailed guidance identifying standard components: structure (40–60 years), facade/waterproofing (20–40 years), general technical installations (15–25 years), fixtures and fittings (8–15 years). This French guidance provides a useful reference for IAS 16 component depreciation, though IAS 16 requires entity-specific assessment.

Audit Expectations

French statutory auditors (commissaires aux comptes) follow NEP (Normes d'exercice professionnel) which are aligned with ISA. The audit of depreciation estimates under NEP 540 requires the auditor to evaluate the reasonableness of useful life and residual value estimates, assess whether component depreciation is applied where required, verify that the annual review of estimates is performed, and evaluate the appropriateness of the depreciation method. The H3C has noted that auditors should not simply accept management's estimates without independent assessment.

France-Specific Considerations

French-specific considerations include: the tax system allows both linear depreciation (amortissement linéaire) and declining balance depreciation (amortissement dégressif) for qualifying assets, with the declining balance coefficient varying by useful life (1.25× for 3–4 years, 1.75× for 5–6 years, 2.25× for 7+ years). These fiscal rates are specific to French tax law and should not be used for IAS 16 without entity-specific justification. The concept of amortissement dérogatoire (excess tax depreciation) allows French entities to record the difference between fiscal and economic depreciation in equity — this is a French GAAP concept with no IAS 16 equivalent.

Common Inspection Findings

Fiscal declining balance coefficients used for IAS 16 without entity-specific justification

Component splits for buildings not updated to reflect entity-specific conditions

Annual review of residual values not documented — defaulting to zero without assessment

Insufficient disclosure of the basis for useful life estimates

Changes in depreciation estimates not properly identified and disclosed as IAS 8 changes

Frequently Asked Questions — France

How does French component depreciation (approche par composants) relate to IAS 16.43?
France mandated component depreciation from 2005 under CRC 2002-10, predating international adoption. The French component approach for buildings (structure, facade, technical installations, fixtures) provides a useful starting point for IAS 16.43 compliance, but IAS 16 requires entity-specific assessment rather than standardised component splits.
Can I use the French fiscal declining balance rates for IAS 16?
No. The French amortissement dégressif coefficients (1.25×, 1.75×, 2.25×) are tax-specific rates. IAS 16 requires the depreciation method to reflect the consumption pattern of economic benefits. If reducing balance is appropriate, the rate should be based on the entity's assessment, not the fiscal coefficient.
What is amortissement dérogatoire and does it apply under IAS 16?
Amortissement dérogatoire is the excess of fiscal depreciation over economic depreciation, recorded in equity under French GAAP. It has no equivalent under IAS 16. Under IFRS, the difference between accounting and tax depreciation creates deferred tax under IAS 12, not an equity adjustment.
What has the AMF recommended regarding depreciation disclosures?
The AMF recommends: entity-specific useful life disclosures (not generic ranges), clear identification of the components used for significant assets, explanation of the basis for residual value estimates, and disclosure of any changes in estimates with their financial impact.
How do French tax depreciation rules differ from IAS 16?
French tax allows linear or declining balance (with specific coefficients). Tax useful lives follow the usage normal system or can be agreed with the tax administration. IAS 16 requires entity-specific estimates based on expected use. The systems are independent — maintain parallel schedules and account for temporary differences under IAS 12.

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