Both are accounting estimates reviewed at least at each year-end, with changes applied prospectively. Under TFRS, useful life is set independently of the tax depreciation rates, and the difference gives rise to deferred tax.
Source: TMS 16, TMS 38
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DepreciationThe systematic allocation of the cost of non-current assets to expense over their useful lives.Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Property, plant and equipmentPhysical assets used in the production of goods and services, for rental or for administrative purposes, and expected to be used for more than one period.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.Allowance for doubtful receivablesAn allowance made for receivables whose collection has become doubtful, recognising the expected loss as an expense.
Last updated: November 8, 2026 · This definition is for general information only.