avskrivninger
Avskrivninger, in Norwegian accounting, are the systematic allocation of the cost of tangible fixed assets over their estimated useful life. The purpose is to match the expense of an asset with the revenues it helps generate, reflect wear, obsolescence, and the consumption of the asset’s economic benefits. Depreciation is a non-cash accounting entry that affects both the income statement (depreciation expense) and the balance sheet (accumulated depreciation reduces the asset’s carrying amount).
- Straight-line depreciation: the depreciable amount (cost minus residual value) is spread evenly over the asset’s useful
- Declining balance (accelerated) depreciation: a fixed rate is applied to the carrying amount, giving higher charges
- Units of production: depreciation is based on actual usage or output, adjusting for activity levels.
- Component depreciation: major components of an asset are depreciated separately when they have different useful lives.
Residual value and useful life
The residual value is the estimated amount recoverable at the end of an asset’s life. Useful life
Tax depreciation (avskrivninger) may differ from accounting depreciation. Tax authorities often prescribe allowed methods and rates,
Depreciation knowledge is complemented by impairment tests when events indicate a carrying amount may not be
Machinery and equipment: several years to a couple of decades; vehicles: around 4–8 years; buildings: typically