Poistotavoissa

Poistotavoissa refers to accounting methods for depreciation in Finnish accounting. Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. Companies are required to depreciate most of their fixed assets. There are several approved depreciation methods in Finland, with the declining balance method (degression method) being the most common for tax purposes. Under this method, a larger depreciation amount is recognized in the early years of an asset's life, and the amount decreases over time. The straight-line method, where the depreciation expense is the same each year, is also permissible. The choice of depreciation method can impact a company's reported profit and tax liability. However, the principles of accounting for depreciation are governed by Finnish accounting standards and tax legislation, which provide specific rules and limitations on how assets can be depreciated. The useful life and residual value of an asset are crucial factors in determining the annual depreciation charge. Companies must consistently apply their chosen depreciation method unless there is a valid reason to change it.