background image
6.3. Depreciation and Amortization

Fixed assets (except land and goodwill) are depreciated using reducing balance method. Depreciation is calculated on the basis of pooling of depreciable assets.

Each depreciable asset is placed in a pool (referred to as pools of depreciable assets) at the time it is first owned or so used. Depreciation is computed at rates prescribed for each pool of assets. Depreciation is allowed for the full year in the year of acquisition where an asset is added to the pool for more than 6 months. If the addition is made for less than 6 months or 3 months, depreciation is allowed at either two thirds or one third of the normal rate, respectively.

The applicable depreciation rates are as below:

Buildings, structure and similar works of a permanent nature 5%
Computers, fixtures, office furniture and office equipment 25%
Automobiles, buses and minibuses 20%
Construction and earth-moving equipment and any other depreciable asset 15%

Additional depreciation is available for manufacturing industries at one third of the normal rate.

Intangible assets are amortized over the useful life of the asset.