Depreciation of a fixed asset used seasonally - when is it possible?


Taxpayers conducting business activity seasonally, and thus using fixed assets only in this period, cannot make depreciation write-offs throughout the year. A fixed asset used seasonally should be depreciated only in the period of its use.

For example, if the production machine is used only in the summer season every year, e.g.from June to September, depreciation write-offs are made only for these 4 months of the year. The fixed asset is not depreciated for the remaining 8 months.

Depreciation of a fixed asset used seasonally - determination of the amount of monthly depreciation

Determining the amount of monthly write-offs for fixed assets used seasonally can be made using one of two methods:

  1. dividing the annual amount of depreciation by the number of months in a season, or
  2. dividing the annual amount of depreciation by 12 months of the year.

It is up to the taxpayer to choose the method of calculating the amount of monthly depreciation.

If the depreciation rate set for a given fixed asset is 14%, its initial value is PLN 100,000, and the useful life in each year is 4 months (from June to September), then, in accordance with the methods presented above, the monthly depreciation write-off is as follows:

  1. PLN 3,500 x (100,000 x 14% = 14,000, 14,000 / 4 = 3,500)
  2. PLN 1,166.66 x (100,000 x 14% = 14,000, 14,000 / 12 = 1,166.66)

With both methods, the calculated amount of depreciation will be recognized as costs every year for a period of 4 months, i.e. the useful life of the fixed asset. In the first method, the total amount of depreciation in the season will be PLN 14,000 (it will be equal to the annual amount of depreciation), and in the second method, PLN 4,666.64.

As can be seen from the above calculations, the possibility of calculating depreciation write-offs only during the useful life of a fixed asset does not mean that the sum of these write-offs will be lower than if the asset was depreciated throughout the year. It is the taxpayer who decides whether he wants to reduce the tax burden through larger depreciation charges, thus shortening the depreciation period using the first method, or whether it is more advantageous for him to extend the depreciation period of a given asset using the second method.

Regardless of the method chosen by the taxpayer, depreciation write-offs are made and recognized as costs only in the season, i.e. in the months in which the asset is used.