Will inflation adjustment be made for fixed assets that have completed the depreciation period in the 2024/2. period provisional tax?
It is optional to make inflation adjustment for economic assets subject to depreciation that have completed their useful life period and whose value has been completely destroyed through depreciation (including depreciable economic assets that continue to be followed with their trace value in the business records) and their accumulated depreciation.
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Communiqué No. 555 of the Tax Procedure Law;
Adjustment of accumulated depreciation
ARTICLE 19- (1) Accumulated depreciation allocated for depreciable economic assets are non-monetary assets and are subject to inflation adjustment. However, in subparagraph (7) of paragraph (A) of Article 298 (A) of the duplicate Article 213 of the Law No. 213, it is ruled that in the inflation adjustment to be made in the event that the inflation adjustment conditions occur again after an accounting period in which inflation adjustment is not applied, the accumulated depreciation will be adjusted by taking into account the rate of increase in the value of the asset to which they belong on the balance sheet date after the adjustment.
Therefore, in the restatement of the balance sheet at the end of the 2023 accounting period, the accumulated depreciation shall be adjusted by taking into account the rate of increase in the value of the asset at the balance sheet date after the restatement.
For example, the value of an economic asset with an adjustment value of TL 1.000.000 and accumulated depreciation of TL 600.000, as a result of the correction with the correction coefficient of 2,45, is (1.000.000×2,45=) TL 2.450.000, in this case, the rate of increase in the value of the economic asset will be (2.450.000-1.000.000)/1.000.000=) 145%. The depreciation amount will be adjusted taking into account this rate and the adjusted amount will be calculated as (600.000+600.000x%145=) 1.470.000 TL.
Pursuant to Article 320 of the Law No. 213, depreciation amounts that have not been allocated in previous years on economic assets subject to depreciation will not be accepted as allocated and will not be taken into account in the inflation adjustment. It is natural that these amounts cannot be taken into account as expenses after inflation adjustment.
(2) It is optional to subject the economic assets subject to depreciation that have completed their useful life period and whose value has been completely destroyed through depreciation (including depreciable economic assets that continue to be followed with the trace value in the business records) and their accumulated depreciation to inflation adjustment.
Source: Istanbul Chamber of Certified Public Accountants
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