DEPRECIATION OF LONG-TERM ASSETS AND ITS IMPACT ON FINANCIAL STATEMENTS AND TAXATION IN ACCORDANCE WITH IFRS

Annotatsiya

Depreciation of long-term assets plays a crucial role in financial reporting and taxation, particularly for assetintensive enterprises. This study examines the impact of depreciation on financial statements and tax outcomes by analyzing the interaction between accounting depreciation under International Financial Reporting Standards (IFRS) and depreciation rules prescribed by tax legislation. Using a mixed-methods research approach, the study combines a qualitative analysis of relevant accounting standards and tax regulations with a quantitative examination of financial statement data from selected enterprises. The findings indicate that depreciation significantly affects reported profitability, the carrying amounts of assets, and key financial performance ratios, while also serving as a major source of differences between accounting profit and taxable profit. Accelerated tax depreciation reduces current tax liabilities but gives rise to temporary differences and deferred tax liabilities. The study concludes that depreciation is a significant accounting estimate with implications for financial statement comparability, tax planning, and managerial decision-making, highlighting the need for transparent policies and consistent application.