IDEAS home Printed from
   My bibliography  Save this article

Issues Related To The Accounting Treatment Of The Tangible And Intangible Assets Depreciation


  • Danciu Radu


  • Deac Marius



The issue of accounting depreciation is an older concern of this study's authors on the incidence over the true and fair view of the earning and the net value of the non- current assets. Proceeding from the consideration that the present depreciation methods, acknowleged by the accounting standards and regulations are not sufficient to render the reality of the irreversible impairment of the fixed assets nor that of the material and immaterial investment recovery we performed a research on the indicators reported by 20 companies in Cluj county and we applied a questionnaire to each entity on the depreciation methods used, their incidence on the true and fair view and their proposals for the completion of the depreciation methods. The objective of the research is to identify the most appropriate depreciation methods, truthfully illustrating the effects of the irreversible impairment on the net asset and on the earning, to introduce the excluded assests in the cathegory of the non-current assets ( like property and plant, goodwill, intangible assets created with ones own strengths) and the enforcement of appropriate treatments to the revaluation differences and their own overhead investments. The International Accounting Standard IAS 16 - Property, plant and equipment refers to three depreciation methods: the straightline method, the diminishing balance method and the technical depreciation method (units of production method). In Romania only two of these methods are accepted: the straightline method, the diminishing balance method and the accelerated method was additionally instilled, which is used internationally in exceptional situations and not currently. The results of the research led us to the following conclusions: - for the depreciation of the machinery, facilities and technological equipments it is recommended to use the technical depreciation method or the units of production method; taking into consideration the financial conception on the non-current assets the depreciation of all cathegories of tangible and intangible assets is recommended, the purpose being the gradual recovery of the investment in these assets and not the covering of the wear and tear or obsolescence; - the surplus value resulted from the revaluation of the tangible assets musn't be depreciated because it generates in fictional expenses; - the depreciation of the overhead assets musn't be acknowledged as an expense but it should be treated as a reduction in the income resulting from fixed assets; the completion of the depreciation concept with its financial meaning, namely the process of recovering the investments in tangible and intangible assets; The application of the research results leads to correcting the image provided by financial reportings on the tangible and intangible assets contribution to the income, the depreciation's reflection in the expenses and the net value of these assets. The contribution of the authors consists in interceding to ensure the application of the research results by modifying and completing the national accounting rules in order to achieve accounting's consecrated objective: reproducing a true and fair view on the financial position and performances. These issues have not been addressed in other specialty studies in the country or abroad.

Suggested Citation

  • Danciu Radu & Deac Marius, 2011. "Issues Related To The Accounting Treatment Of The Tangible And Intangible Assets Depreciation," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 498-502, December.
  • Handle: RePEc:ora:journl:v:1:y:2011:i:2:p:498-502

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Ieva Kozlovska, 2015. "The impact of long-lived non-financial assets depreciation/amortization method on financial statements," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 4(2), pages 91-108.

    More about this item


    irreversible depreciation; accounting depreciation; technical depreciation depreciation; provision for positive reevaluation diferences;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ora:journl:v:1:y:2011:i:2:p:498-502. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catalin ZMOLE) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.