BizCortex documentation

Depreciation methods

The five depreciation methods and the German rules behind them.

BizCortex implements the German depreciation (AfA) rules. Depreciation is posted directly against the asset account; there is no separate accumulated depreciation account. Have the settings reviewed by your tax advisor.

Who can use this

  • Owner
  • Admin
  • Accountant

Fields and options

Straight line

Equal monthly amounts over the useful life, starting in the month of acquisition (pro rata by month, § 7 (1) EStG). The last month takes the rounding remainder.

Declining balance (legal cap)

A fixed percentage of the remaining book value per year (§ 7 (2) EStG), spread over the months. It is only allowed for acquisitions from 1 January 2020 to 31 December 2022 (2.5 times the straight line rate, at most 25 percent), from 1 April 2024 to 31 December 2024 (2 times, at most 20 percent) and from 1 July 2025 to 31 December 2027 (3 times, at most 30 percent). It switches to straight line as soon as that gives a higher amount. For other dates the method is refused.

Low value asset write off (up to 800 euros)

The full net cost is written off in the month of acquisition (GWG, § 6 (2) EStG). Only for net cost up to 800 euros.

Pool (250 to 1,000 euros, 5 years)

Collective item (Sammelposten, § 6 (2a) EStG) for net cost above 250 and up to 1,000 euros. 20 percent per year for 5 years, posted on 31 December, without pro rata. A disposal does not reduce the pool; only the sale proceeds are posted.

Double declining (internal)

Twice the straight line rate on the remaining book value, switching to straight line when that is higher. For internal purposes only; not allowed for German tax.

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