Thursday, September 6, 2012
Section 225 of R A 7160
SEC. 225. Depreciation Allowance for Machinery. - For purposes of assessment, a depreciation allowance shall be made for machinery at a rate not exceeding five percent (5%) of its original cost or its replacement or reproduction cost, as the case may be, for each year of use: Provided, however, That the remaining value for all kinds of machinery shall be fixed at not less than twenty percent (20%) of such original, replacement, or reproduction cost for so long as the machinery is useful and in operation.
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This is a series of deduction against the cost of acquisition of machinery. Since assessment is for every three years, the next revision period for an already declared property as new, would be carrying a deduction of 15% if the annual depreciation is 5% per year.
ReplyDeleteWhile depreciation is one of the factor in arriving the fair Market Value of the property, the government will also update the purchasing power of pesos against the dollar using the Exchange Rate of dollar during the General Revision Period