1 Either straight-line or declining balance method of depreciation is allowable, except for buildings, for which only the straight-line method is permitted.
2 The chosen depreciation method must be applied consistently to assets.
3 When adopting a declining balance method, the remaining book value at the end of the useful life of an asset must be depreciated in a lump sum.
4 Depreciation commences either in the year the expenditure occurs or in the year construction/ installation of an asset is completed. With the approval of the Director General of Taxes, however, depreciation may commence in the year the asset is first used or when production starts or when business income is first earned.
5 The useful life and tariffs of depreciation of tangible assets are governed as follows:
Tariffs of Depreciation
Group of Tangible Useful Life Straight Line Method Double Declining Method
I. Non Building
Group 1 4 years 25% 50%
Group 2 8 years 12,5% 25%
Group 3 16 years 6,25% 12,5%
Group 4 20 years 5% 10%
Permanent 20 years 5%
Non Permanent 10 years 10%
The Minister of Finance determines the asset categories subsumed into the groups of non-building tangible assets.
Intangible assets (including goodwill) are amortized on the same basis as the non-buildings groups in the table above.