(2024) What are exceptional depreciations?

On Form AV-E¨R (asset register) and Form E¨R (line 29 ff.), "Depreciation for extraordinary economic or technical wear and tear" (AfaA) must also be entered.

If the economic and technical service life differ due to special circumstances, AfaA may be considered in addition to straight-line depreciation. Reasons for AfaA may include:

• Damage or destruction of the asset due to fire, water damage, earthquake, storm, landslide, etc.,
• Total loss or theft of the car,
• Building damage due to a burst water pipe,
• Elimination of hidden defects by the purchaser of the building that were unforeseeable for them,
• Demolition of a building that is not yet technically and economically obsolete after purchase, provided the building was not purchased with the intention of demolition. In this case, the remaining book value of the building can be deducted as AfaA, and the demolition costs can be deducted as advertising costs.

After the extraordinary depreciation has been made, further depreciation is calculated from the following year based on the acquisition or production costs minus the AfaA amount (§ 11c para. 2 EStDV).

Lohnsteuer kompakt: Always claim the AfaA in the year the damage occurs, but no later than the year you discover the damage. This also applies if you expect an insurance payment. If you receive compensation from the insurance company in the following year, it must be recorded as operating income in the year of receipt.

AfaA can only be claimed for assets that are depreciated linearly. However, AfaA is not permitted for declining balance depreciation. An exception applies to buildings: AfaA can be claimed regardless of whether the building is depreciated linearly or declining balance.

Lohnsteuer kompakt: For movable assets that are depreciated using the declining balance method, AfaA is not possible. However, if you switch from declining balance to straight-line depreciation, this option becomes available again.