The exceptional depreciation constitutes a powerful tax tool allowing companies to optimize their tax burden while respecting accounting principles. This mechanism, particularly advantageous for industrial companies, offers increased financial flexibility while falling within a strict regulatory framework. Let’s explore this system in detail and its implications for French companies.
Definition and principles of exceptional depreciation
The exceptional depreciation represents the difference between decreasing tax depreciation and straight-line accounting depreciation. This divergence results from the application of two distinct methods to assess the depreciation of an asset:
- Accounting depreciation, which reflects the economic reality wear and tear of the property
- Tax depreciation, which follows specific rules defined by the tax administration
Concretely, the exceptional depreciation applies when the tax annuity is greater than the accounting annuity. This situation generally occurs in the first years of use of the property, when the decreasing method is chosen for tax purposes.
It is essential to emphasize that the exceptional depreciation is optional. This is a tax option which businesses can choose to apply or not. On the other hand, if they decide to use it, they must account for it to benefit from the associated tax advantage.
Calculation and accounting of exceptional depreciation
The calculation of the exceptional depreciation is carried out by determining the difference between the tax annuity and the accounting annuity. This operation requires the establishment of two separate depreciation plans : one tax and the other accounting.
The accounting for the exceptional depreciation is done through a specific writing :
- Debit: Allowance for exceptional depreciation (account 68725)
- On credit: Excessive depreciation (account 145)
This entry makes it possible to note the exceptional depreciation on the liabilities side of the balance sheet, in the category of regulated provisions. It is necessary to note that the exceptional depreciation is subject to recovery when the accounting annuity becomes greater than the tax annuity, generally at the end of the depreciation period.
| Stage | Action |
|---|---|
| 1 | Establish the accounting depreciation plan (linear) |
| 2 | Establish the tax depreciation plan (degressive) |
| 3 | Calculate the difference between tax and accounting annuities |
| 4 | Account for exceptional depreciation |
| 5 | Carry out the necessary adjustments at the end of the period |
Tax benefits and conditions of application
Exemptive depreciation offers significant tax advantage to businesses by allowing them to deduct depreciation more quickly in the first years. This acceleration of the tax deduction results in:
- A corporate tax reduction short term
- A improvement of cash flow of the company
- A investment incentive in capital goods
However, the application of the exceptional depreciation is subject to certain conditions:
- It mainly concerns capital goods of industrial companies
- The goods must be new
- The duration of use of the property must be greater than 3 years
- The property must be eligible for the decreasing depreciation regime.
Among the goods likely to benefit from this regime, we find in particular:
- Materials and tools used for industrial operations
- Facilities intended for water purification and atmospheric sanitation
- Safety equipment
- Office machines (except typewriters)
- Warehousing and storage facilities
Accounting and tax implications
The use of exceptional depreciation has significant repercussions on the presentation of the company’s accounts and its tax obligations:
1. Respect for the connection between tax and accounting rules : Excessive depreciation makes it possible to reconcile the requirements of accounting (faithful image) with those of taxation (tax optimization).
2. Impact on financial statements : The presence of exceptional depreciation on balance sheet liabilities can influence the financial analysis of the company. It is therefore crucial to mention them clearly in the accounting annex, with detailed information on their nature and their evolution.
3. Treatment in the event of transfer : When the asset concerned is sold, the exceptional depreciation must be completely taken over. This operation neutralizes the tax advantage obtained over the period of ownership of the property.
4. Increased vigilance : The use of exceptional depreciation requires rigorous management and precise monitoring of tax and accounting depreciation plans. An error in this area can have significant tax consequences.
In conclusion, the exceptional depreciation represents a powerful tax lever for businesses, particularly in industrial sectors. Its judicious use can help improve the competitiveness of French companies by facilitating the financing of their investments. However, its implementation requires in-depth accounting and tax expertise to take full advantage of it while respecting the regulatory framework in force.