Fiscal Depreciation vs PSAK 16 and 19

Fiscal Depreciation vs PSAK 16 and 19

PPh - 04 Sep, 2023 15:09 WIB

Jakarta, Ideatax -- The Government has just issued Minister of Finance Regulation Number 72 of 2023 concerning Depreciation of Tangible Assets and/or Amortization of Intangible Assets. Through this sweeping regulation, the Government replaced three previous Regulations at once: Minister of Finance Regulation Number 248/PMK.03/2008, Minister of Finance Regulation Number 249/PMK.03/2008 and Minister of Finance Regulation Number 96/PMK.03/2009.


In the consideration, it is stated that one of the objectives of the issuance of this regulation is to provide law, justice, and ease of calculation of depreciation of tangible assets and/or amortization of intangible assets for tax purposes and in line with the regulatory simplification program.


In general, there are two depreciation methods recognized in the regulation: the straight-line method and the double declining method. Article 2 paragraph (1) of Minister of Finance Regulation No. 72 of 2023 regulates that depreciation is carried out in equal parts over the specified useful life of an asset. Furthermore, paragraph (2) of the regulation also regulates that depreciation of tangible assets other than buildings can also be carried out in decreasing parts over the useful life calculated by applying the depreciation rate to the book value and at the end of the useful life the book value is depreciated at once, as shown in the following table:

At first glance, there is no difference between the regulation between PMK 72 of 2023 and the previous regulations. However, if we look closely, we will find some fundamental changes. For example, Article 6 paragraph (2) of PMK 72 regulates that if a permanent building has a useful life of more than 20 years, then depreciation can be carried out in two ways: by using a useful life of 20 years, or using a useful life in accordance with the actual circumstances based on the taxpayer's bookkeeping. An arrangement that we did not find in the previous regulation.


Furthermore, the provision also regulates that for taxpayers who have depreciated permanent buildings before 2022 can depreciate in accordance with the actual useful life of the building by first submitting a notification to the Director General of Taxes no later than April 30, 2024.


Another new regulation is related to insurance reimbursement. Article 8 of PMK 72 Year 2023 regulates that in the event of a transfer or withdrawal of assets that receive insurance reimbursement, the amount of fiscal residual value is charged as a loss, and the amount of selling price or insurance reimbursement received is recognized as income in the year of withdrawal of assets.


In line with the regulations in the field of depreciation, the Government also regulates that amortization of intangible assets for tax purposes can be carried out using two methods, namely the straight-line method or the double declining balance method, provided that it meets the applicable regulations. The straight-line method is done by dividing the book value of the asset by the useful life of the asset so as to obtain the same amortization expense for each year. While the double declining balance method is done by applying the amortization rate on the expense or on the remaining book value and at the end of the useful life is amortized at once. Details of the rates can be seen in the following table:

In the case of intangible assets that have a useful life of more than 20 years, taxpayers can amortize in accordance with the group IV rate or by using the useful life in accordance with the actual useful life as long as it is conducted in an orderly manner and notifies the DGT.


PSAK 16 and 19

Prior to 2007, the provisions regarding depreciation were regulated in the Statement of Accounting Standards (PSAK) 17 regarding depreciation accounting (Yuhaniar, 2019). However, based on information from IAI (2023), it is known that since 2007, PSAK 17 has been revoked and the provisions regarding depreciation have become an integral part of PSAK 16 (Fixed assets). In fact, the provisions of PSAK 17 governing amortization have been revoked since 2000 and replaced by PSAK 19 (Intangible Assets).


According to PSAK 16, fixed assets are tangible assets that are possessed to be used in production or supply of goods or services, to be supplied to other parties, or for administrative purposes and are expected to be used for more than one period. There are six points regulated in PSAK 16 regarding fixed assets, including asset recognition, fixed asset expenditure, fixed asset measurement, fixed asset depreciation, termination and disposal of fixed assets and presentation and disclosure of fixed assets (Handoko, 2022).


Regarding depreciation, PSAK 16 regulates that there are three conditions for an asset to be depreciated: the asset is expected to be used for more than one accounting period, the asset has a limited useful life and the asset is held by a company to be used in the production process or supply of goods and services. The useful life of an asset is a matter of professional judgment estimated based on experience with similar types of assets. For assets that utilize new technology or are used in the production of a new type of product and for which there is little experience, the estimation of useful life may be more difficult to determine.


PSAK 16 regulates that there are three commercial depreciation methods that can be used by entities to conduct depreciation: the straight-line method, the declining balance method and the unit of production method (Accounting Unsoed, 2023).


Furthermore, PSAK also regulates that fixed assets begin when the assets are ready for use, namely when the assets are in the desired location and condition so that the fixed assets are ready for use (Siswati, 2016). On the other hand, PSAK 19 regulates that intangible assets are identifiable non-monetary assets without a physical form, but can be identified and controlled by an entity. Intangible assets must be recognized if and only if it is probable that the entity will obtain future economic benefits from the asset and the cost of the asset can be measured reliably.


There are two methods for recording intangible assets: the cost method and the revaluation method. The cost method is used by deducting the acquisition cost with accumulated amortization and accumulated impairment. Meanwhile, the revaluation method is used by periodically revaluing intangible assets (Simorangkir, 2016).


Regarding the amortization, PSAK 19 regulates that if the entity can reliably estimate the useful life of intangible assets so that fixed assets are estimated to have a limited useful life, then the intangible assets can be amortized. However, if the entity cannot estimate the useful life of the intangible asset reliably so that the useful life of the asset cannot be determined, then the intangible asset cannot be amortized.


Flexibility of PMK 72

According to the matters mentioned earlier, at least it can be concluded that the regulations stipulated in the Minister of Finance Regulation No. 72 Year 2023 have increasingly accommodated the arrangements of PSAK 16 and PSAK 19. For example, Article 3 of PMK 72 stipulates that in general, depreciation begins in the month in which expenditures to acquire tangible assets begin. However, PMK 72 also provides an exception, namely for tangible assets that have never been used or have not produced, depreciation begins in the month the asset is used to earn, collect, and maintain income.


The next, flexibility of PMK 72 can also be seen in article 6 which regulates that if a permanent building has a useful life exceeding twenty years, the taxpayer can choose to use a useful life of twenty years or according to the actual useful life.


With the flexibility of the provisions regarding depreciation and amortization towards the development of the business world, it is expected that temporary differences arising between commercial and fiscal bookkeeping can be minimized.



Accounting Unsoed. (2023, Agust 13). Accounting Standard Resume (PSAK 16). Retrieved from Accounting Unsoed:

Handoko, B. L. (2022, April 1). Memahami PSAK 16 Tentang Penyajian Aset Tetap. Retrieved from Binus University:

IAI. (2017, Januari 1). SAK Efektif per 1 Januari 2017. Retrieved from Ikatan Akuntan Indonesia:



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