Difference between accounting and fiscal depreciation?

Accounting depreciation follows the real useful life estimated by the company. Fiscal depreciation follows standard durations from the fixed asset catalogue and is used for income tax. Differences generate fiscal adjustments.

Which assets are depreciated?

Tangible fixed assets (equipment, vehicles, buildings) and intangibles (software, licenses, patents) above the fixed-asset threshold with a useful life over one year. Land is NOT depreciated.

Does depreciation affect cash flow?

Not directly — it is a non-cash expense. The money left at asset purchase. But it reduces taxable profit, so it indirectly reduces tax paid.

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Category: Financiar

Depreciation

Quick answer: Systematic allocation of a fixed asset's cost over its useful life, recognised as a periodic expense.

Key takeaways

Straight-line — equal amount each year (most common)
Declining balance — higher amounts early, decreasing
Accelerated — up to 50% in the first year, rest straight-line (allowed fiscally for certain assets)

What depreciation is

Depreciation is the accounting process by which the cost of a fixed asset (equipment, vehicle, building, software) is allocated as an expense over the asset's useful life, instead of being fully expensed in the year of purchase.

Why it exists

A 120,000 RON machine with a 5-year life is not a 120,000 RON expense in one year, but ~24,000 RON/year. Thus the P&L correctly reflects the asset's wear over time and matches the expense with the revenue the asset produces.

Depreciation methods

Straight-line — equal amount each year (most common)

Declining balance — higher amounts early, decreasing

Accelerated — up to 50% in the first year, rest straight-line (allowed fiscally for certain assets)

Accounting vs fiscal depreciation

Accounting depreciation (based on real useful life) may differ from fiscal depreciation (based on standard durations in the fixed asset catalogue). The difference generates adjustments in corporate income tax.

Impact on financial statements

On the balance sheet: the asset value decreases by accumulated depreciation

On the P&L: annual depreciation appears as an expense (account 681)

Frequently asked

Difference between accounting and fiscal depreciation?: Accounting depreciation follows the real useful life estimated by the company. Fiscal depreciation follows standard durations from the fixed asset catalogue and is used for income tax. Differences generate fiscal adjustments.
Which assets are depreciated?: Tangible fixed assets (equipment, vehicles, buildings) and intangibles (software, licenses, patents) above the fixed-asset threshold with a useful life over one year. Land is NOT depreciated.
Does depreciation affect cash flow?: Not directly — it is a non-cash expense. The money left at asset purchase. But it reduces taxable profit, so it indirectly reduces tax paid.

Where Azuvio fits

Related terms

Balance sheet (Romania) — Financial statement showing a company's position at a point in time: assets = equity + liabilities.
Profit and loss statement — Financial statement showing a company's revenues, expenses and result (profit/loss) over a period.
Chart of accounts (Romania) — Structured list of all accounting accounts a company uses, organised by classes and groups per Romanian OMFP regulations.
Trial balance (Romania) — Monthly accounting summary that confirms debits equal credits and feeds every Romanian tax filing (D300, D394, D112, SAF-T).

Last updated: 2026-07-06