Depreciation Calculator
for General
Run depreciation under IAS 16 with full component splits, journal entries, and method comparison. Export-ready WPs that survive the partner review.
Depreciation schedule, audit-ready.
Not just calculated.
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IAS 16 depreciation for General
On the audits we work, depreciation is one of the first numbers tested and one of the most often re-stated. Useful lives carried forward from the prior file with no documented review. Residual values left at zero because someone defaulted there at acquisition. Buildings depreciated as a single line with no component split. None of these are technical errors that need a deep IAS 16 read — they are documentation gaps that look ordinary on a clean year and turn into findings when the asset base grows or a regulator pulls the file.
IAS 16.60 wants the depreciation method to reflect the pattern the entity actually consumes the asset's economic benefits. In practice that narrows to three working choices — straight-line, reducing balance, units of production — and a paragraph explaining why this client got this one. Revenue-based depreciation is the one IAS 16.62A rules out completely; everything else lives in judgment. For office furniture and IT, straight-line is the conventional answer. For motor vehicles where the value drop is front-loaded, reducing balance lines up with the wear pattern. For machinery on a usage-driven contract, units of production is defensible. The choice is yours; the rationale is what makes it reviewable.
Component depreciation is the IAS 16.43 rule that catches files at inspection. A building is not one asset — it is structure (40+ years), roof (15–25), HVAC (10–15), elevators (15–25). An aircraft separates airframe from engines because the maintenance cycles differ by an order of magnitude. The mistake we see most: PP&E roll-forward treats acquisitions over EUR 500K as monolithic, leading to depreciation profiles that look fine on paper but drift from cash replacement reality. The calculator runs per-component schedules and aggregates them — the components have to be identified at acquisition, not at year-end.
Typical asset classes: General
| Asset | Useful Life | Method | Notes |
|---|---|---|---|
| General machinery | 5–15 years | Straight-line | Most common default for general-purpose equipment |
| Office furniture | 5–12 years | Straight-line | Low residual value, predictable wear |
| IT equipment | 3–5 years | Straight-line | Rapid obsolescence, minimal residual value |
| Motor vehicles | 3–8 years | Reducing balance | Higher early depreciation reflects market value decline |
| Buildings | 25–50 years | Straight-line | Land component must be separated and never depreciated (IAS 16.58) |
Key IAS 16 considerations: General
Depreciation method must reflect the pattern of consumption of future economic benefits (IAS 16.60)
Residual value and useful life must be reviewed at each year-end (IAS 16.51)
Component depreciation is mandatory for parts with significant cost relative to total (IAS 16.43)
Land has unlimited useful life and is never depreciated (IAS 16.58)
Revenue-based depreciation methods are prohibited (IAS 16.62A)
Worked Example: Manufacturing Equipment
Entity A acquires manufacturing equipment on 1 July 2025 for €500,000 with an estimated residual value of €50,000 and a useful life of 10 years. The entity's year-end is 31 December.
Cost: €500,000
Residual value: €50,000
Depreciable amount: €450,000
Annual depreciation: €45,000 (straight-line)
First year depreciation: €22,500 (pro-rata: 6 months)
Audit considerations
IAS 16.50 requires that the depreciable amount be allocated on a systematic basis over the useful life. IAS 16.51 mandates that residual value and useful life are reviewed at least at each financial year-end, with any change treated as a change in accounting estimate under IAS 8. IAS 16.55 specifies when depreciation begins and ceases. IAS 16.58 addresses land. IAS 16.62A prohibits revenue-based depreciation methods.