ANALYSIS OF DEPRECIATION TRANSACTIONS IN TANGIBLE FIXED ASSETS IN TERMS OF ACCOUNTING STANDARDS AND TAX LEGISLATION AND ASSESSMENT OF ITS EFFECTS ON FINANCIAL STATEMENTS

Yıl 2012, Cilt: 12 Sayı: 24, 185 - 216, 01.12.2012

Ayşe Gül Hatipoğlu

Öz

The concept of tangible fixed asset is used to describe physical assets with limited
economic life (benefit) held by enterprises to be used throughout multiple business
periods, which are subject to wear and tear and loss of value throughout the time they are
to be used. Amortization, lexical meaning of which is wear and tear depreciation, on the other hand, is in the broadest sense the partition of costs of the fixed asset to multiple
periods by certain methods. The accuracy of depreciation transactions of tangible fixed
assets, which are of particular importance for industrial enterprises are essential for
correct calculation of costs, pricing decisions and in terms of financial position statements
are prepared according to the needs of financial information users.
Regulations regarding depreciation transactions in our country are present in tax
legislation, International Financial Reporting Standards (IFRS), Turkish Accounting
Standards 16 (TAS 16) and Turkish Financial Reporting Standards for SMEs (TFRS for
SMEs). Although there are many articles regarding depreciation in many acts in tax
legislation, regulations on the concerned issue are for the most part present in Tax
Procedures Law (TPL). While all enterprises in our country have to abide by the
provisions of TPL, public enterprises which are only responsible against the public have
to conform to full set of TASs. However, the new Turkish Commercial Code (TCC)
which will enter into force as of 1st of July, 20112 will impose obligations on enterprises
which are not accountable against the public and prepare general purpose financial
statement to abide by TFRS for SMEs.
There are different applications regarding depreciation transactions in tax legislation,
Full set TAS and TFRS for SMEs. In the basis of these differences lie the different
aspects taken by the tax legislation and accounting standards to depreciation. The focus in
tax legislation is on correct calculation of tax base whereas in accounting standards, the
focus is on producing fair information
Among the major differences between Tax Procedures Law (TPL) and accounting
standards is the calculation of depreciable value. While the residual value is avoided in
determining depreciable value according to TPL, according to TAS 16 and TFRS for
SMEs, depreciable value is determined after residual value is deducted from cost value of
the asset. On the other hand, while interest expenses occurred during the acquiring of the
asset, delay interests, currency exchange differences and commission expenses have to be
included in the cost of the asset, according to TAS 16, concerned borrowing costs are not
included in the asset cost, except in qualifying assets. According to TFRS for SMEs,
however, the total of such borrowing costs are regarded as period costs and are under no
circumstances associated with asset cost. According to TPL, asset’s cost value is not
changed as long as the asset is not subjected to a value or capacity increasing expenditure
or inflation adjustment in financial statements. According to accounting standards, cost
value is revaluated after being activated. According to TAS 16, however, while
enterprises are able to use either one of cost or revaluation methods in asset valuation,
according to TFRS for SMEs, only the cost method can be used. Hence, while tangible
fixed assets can be indicated below or above the cost value in financial statements in
valuation periods following the first year when they are credited according to TAS 16,
according to TFRS for SMEs, tangible fixed assets are not reflected to financial
statements with values exceeding the cost value.
Another difference between TPL and accounting standards is regarding the period of
depreciation. Depreciation period, according to TPL, starts in the year when the asset is
credited and depreciation is carried out on an annual basis according to economic life
determined by the Ministry of Finance. According to this code, date is set as the basis for
determining depreciation period. The enterprise is able to continue to depreciate for
tangible fixed assets with selling purposes and future non-useful fixed assets. According
to TMS 16 and TFRS for SMEs however, depreciation period starts when the asset is usable and depreciation is carried out according to the useful time determined by the
enterprise. Predictions of the enterprise regarding the useful life are updated annually. In
determining the depreciation period, accounting period is set as basis. Furthermore,
according to accounting standards, depreciation transactions are discontinued for tangible
fixed assets with selling purposes and future non-useful fixed assets. There are
differences between TPL and accounting standards in accepted methods of depreciation.
TPL is mainly based on normal depreciation method and declining balance method.
Additionally, exceptional depreciation method and depreciation method specific for mines
are also legally accepted under certain circumstances. Among these methods, normal
depreciation method can be used by tax payers who keep their books according to
operation account and balance sheets while declining balance method can be used only by
tax payers who use balance sheet in keeping their accounts. According to TPL, it is
possible for enterprises using declining balance method to use normal depreciation
method for a single time. However, as per the previsions of the code, it is not possible to
use declining balance method once the normal depreciation method is used. Pro-rata
deprecation method can only be used in passenger cars based on monthly periods and
depreciation not carried out in the first year can be included to the amount of the final
year. The subjects of depreciation methods are arranged in parallel in to TMS 16 and
TFRS for SMEs. According to accounting standards, the depreciation methods the
enterprises can prefer are straight-line depreciation, declining balance method and unitsof-production
method. Enterprises using accounting standards can also use declining
balance method. If the future economic benefits of the asset create a major change in the
foreseen consumption pattern, the current depreciation method is reviewed.
In case where the current expectations are changed, it is possible for the enterprise to
change its deprecation method so as to reflect the new consumption pattern. According to
standards, pro-rata depreciation method is used for all fixed assets on daily basis and
instead of the final year, depreciation not carried out in the first year is carried out in its
own accounting period.
According to TPL, it is not possible for the depreciation rates determined and
announced by the Ministry of Finance to be changed. If the declining balance method is
used, the deprecation rate is twice the normal depreciation rate, provided that it does not
exceed fifty percent. According to accounting standards, however, depreciation rates
freely selected by enterprises by predicating assets’ useful lives and production amounts
can be changed each year. In case where declining balance method is used, however, the
necessity to follow a certain parameter does not exist and the rate is freely determined by
the predictions of the enterprise.
Different applications between tax legislation and accounting standards regarding
depreciation transactions also cause differences between statements of financial positions
and statements of income. But since tax legislation and accounting standards applications
intersect at a certain point in depreciation transactions, this difference in financial
statements are temporary. In other words, differences caused by different applications
regarding depreciation transactions will disappear in the following periods. Temporary
differences caused by depreciation transactions result in deferred tax claim or tax dept in
statements of financial position. The reason for tax claim or tax dept caused by
depreciation transaction is that the tax expenditure of the concerned period is determined
according to accounting standards and tax reserve is determined according to tax
legislation. Different arrangements between tax legislation and accounting standards result in
separation between commercial profit and financial profit. But with the new Turkish Code
of Commerce entering into effect, this separation will disappear. As of the date of
31.12.2012, enterprises will arrange their financial statements according to accounting
standards. Furthermore, in the calculation of the tax base income statements prepared
according to accounting standards will be made use of.
In this study, depreciation in tangible fixed assets within the context of TPL, TAS and
TFRS for SMEs is covered. Additionally, differences between the regulations are
explained and the results of these differences on statement of financial position and
statement of income are analyzed. Consequently, depreciation examples in the context of
regulations in TPL, TAS and TFRS for SMEs are provided

Anahtar Kelimeler

Fixed Assets, Depreciation, Reporting Standards, Tax Procedures Law

MADDİ DURAN VARLIKLARDA AMORTİSMAN İŞLEMLERİNİN MUHASEBE STANDARTLARI İLE VERGİ MEVZUATI AÇISINDAN İNCELENMESİ VE FİNANSAL TABLOLAR ÜZERİNDEKİ ETKİSİNİN DEĞERLENDİRİLMESİ

Öz

Maddi duran varlık kavramı, işletmelerin birden çok faaliyet döneminde kullanmak amacıyla edindikleri fiziki yapısı olan, kullanıldıkları süre içinde aşınmaya, yıpranmaya ve değer kaybına uğrayan sınırlı bir ekonomik (yararlı) ömrü olan varlıkları açıklamak için kullanılmaktadır. Özellikle sanayi işletmelerinde önemli bir yer tutan maddi duran varlıklara ilişkin amortisman işlemlerinin doğruluğu maliyetlerin doğru bir şekilde hesaplanması, fiyatlama kararları ve finansal tabloların finansal bilgi kullanıcılarının ihtiyacına uygun olarak düzenlemesi açısından son derece önemlidir. Bu çalışmada Vergi Usul Kanunu (VUK), Türkiye Muhasebe Standardı 16 (TMS 16) ve KOBİ Türkiye Finansal Raporlama Standartları (KOBİ TFRS)’ndaki düzenlemeler doğrultusunda maddi duran varlıklarda amortisman ayrılması konusu ele alınmıştır. Ayrıca düzenlemeler arasındaki farklılıklar açıklanarak, söz konusu farklılıkların finansal durum tablosu ve gelir tablosu üzerindeki etkisi incelenmiştir.

Anahtar Kelimeler

Maddi Duran Varlıklar, Amortisman, Muhasebe Standartları, Türkiye Finansal Raporlama Standartları, Vergi Mevzuatı