Depreciation of used assets requires special attention. It is essential to define what is meant by used assets and to identify them correctly.
This term refers to assets that have already been used previously.
In the specific case of real estate, in order to be considered used assets, they must be more than ten years old. This age criterion is essential to determine whether a property falls into the category of used assets and, therefore, requires a differentiated treatment in terms of depreciation.
to be considered as used heritage assets, they must be more than ten years old
How to calculate depreciation of used assets
Once established what is a used asset, we have to contemplate the two methods that the regulations allow for depreciation, according to Article 4.3 of Royal Decree 364/2015:
- On the acquisition price of the used item; in this case, the coefficient to be applied will be, at most, the result of multiplying by two the maximum coefficient set by the amortization tables.
- On the original acquisition price (if known); in this case, the maximum coefficient according to the tables would be applied as a limit.
In cases where the original acquisition price is not available, an expert appraisal can be used to determine the price, applying the same maximum coefficient established by the amortization tables.
Another peculiarity to take into account is that only the value that is accounted for can be deducted for tax purposes. This means that extra-accounting adjustments to Corporate Tax are not allowed due to differences that may exist between accounting and tax amortization.
It is important to emphasize that it is necessary not to confuse the possibility of depreciating for accounting purposes by double the coefficient that would correspond by amortization tables to the used assets, on the one hand, with the tax benefit of accelerated depreciation enjoyed by the entities to which the regime of reduced size entities applies, on the other hand. The latter regime allows a tax deduction for double the amount of the accounting depreciation, generating a tax adjustment for the difference between this tax depreciation and the corresponding accounting depreciation.
In conclusion, it is essential to record depreciation for accounting purposes according to the most appropriate method for each case and to comply adequately with tax obligations.
For questions related to this or other matters of tax, accounting or legal relevance, contact our tax advisors in Barcelona.
