Remaining-Rate Depreciation 

Use

In order to calculate the tax evaluation amount, the report applies remaining-rate depreciation as follows.

Features

In the first year after you acquire an asset, the remaining rate is expressed as:

1 – (depreciation rate × ½)

The depreciation rate is prescribed by law and varies according to an asset’s useful life (see Calculation of Tax Book Values).

In subsequent years, the remaining rate is expressed as:

1 – depreciation rate

In all years, the remaining rate is only given to three decimal places.

Example

You have an asset whose APC is JPY 41,980,000, and which has a useful life of five years.

The prescribed depreciation rate for assets with useful lives of five years is 0.369. The remaining rate in the first year, therefore, is:

1 – (0.369 × ½)

= 1 – 0.1845

= 0.8155

= 0.815

In the second year and every year after, the remaining rate is:

1 – 0.369

= 0.631