Updated: March 27, 2026

Depreciation Methods: IFRS vs Tax in East Africa

Teams usually fail when accounting and tax logic are mixed in one schedule. Keep both views controlled, but separate.

Method Selection Guide

• Straight-line for stable consumption and easier forecasting
• Declining balance for front-loaded economic benefit
• Units-of-production for usage-driven asset classes
• Policy exceptions must be documented with approvals

Control Design

• Lock method changes to approved roles
• Capture old and new values in audit logs
• Run monthly variance reports by category
• Reconcile accounting depreciation to tax depreciation quarterly

Implementation Checklist

• Policy matrix approved by finance leadership
• Default methods mapped by asset subcategory
• Proration convention and cut-off rules documented
• Report pack defined for month-end and audit periods