With the revision of the Korean corporate tax law effective as of January 1, 1995, the legal percentage of residual value has been changed. The residual value of 10% will continue to apply to assets acquired before January 1, 1995. As for the assets acquired after December 31, 1994, 5% residual value applies to assets using declining-balance method and 0% applies to assets using straight-line method. Based on this principle, depreciation keys have been created for Korea according to acquisition year and depreciation method.

Another requirement to be carried out with the revision of the law is to fully depreciate the residual value of 10% of the asset acquired before the end of 1994 by equal amounts from the following (0,1 or 2: dependent from company’s policy of choosing the "gap-years" between the end of ordinary depreciation and the start of uniform depreciation of residual value) year after the completion of depreciation for a three, four or five-year period. If capital expenditure occurs during that period, then this additional value is also depreciated by equal amounts for the rest of the period. To satisfy these legal requirements, new depreciation keys have been created for Korea.

If a declining-balance depreciation method is used to depreciate an asset (which was acquired after Dec 31^st, 1994), 5% of the acquisition value of that asset must be considered as scrap value in order to calculate the annual depreciation percentage rate. The year, in which the net book value of this asset hits 5% residual value, the asset can be written off.

Special depreciation is calculated either by depreciating a specified percentage of ordinary depreciation each year or by depreciating a given percentage in a lump sum in the first year of depreciation. Assets acquired before January 1, 1995 are subject to both methods, and only the second method applies to assets acquired after December 31, 1994.