Poistot

Poistot is the Finnish term for the systematic depreciation or amortization of fixed assets. It covers the allocation of an asset’s cost over its estimated useful life, reflecting the consumption of the asset’s economic benefits. Poistot are commonly applied to tangible assets such as machinery, buildings, and equipment, and in many contexts to intangible assets through amortization as well. The purpose is to match the expense with the periods in which the asset contributes to revenue and to present a realistic value of assets in the financial statements.

Depreciation methods are chosen to reflect how the asset’s value declines over time. The most common methods are straight-line depreciation, which allocates an equal amount each year; declining balance, which starts with higher depreciation in the early years; and units of production, which ties depreciation to actual usage. A company also estimates the useful life and, optionally, the residual (salvage) value of the asset. Changes to estimates are allowed if warranted by new information.

In accounting, depreciation reduces the asset’s carrying amount on the balance sheet and appears as an expense in the income statement. It is separate from impairment, which may require writing down an asset if its recoverable amount falls below carrying value. Tax rules may set different limits and rates for deductible depreciation, so tax depreciation can differ from accounting depreciation.

Overall, poistot provide a structured approach to recognizing the cost of long-term assets over time, supporting both accurate financial reporting and tax calculations in Finland.