Depreciation
Depreciation spreads the cost of a fixed asset over the years of its use; under commercial law it is mandatory as soon as a loss of value occurs, and for tax purposes flat rates per category are accepted.
Definition
Two methods are usual: straight-line, that is an equal amount per year on the acquisition value, and declining balance, that is an equal percentage of the current residual value. The declining balance method writes off more at the start and is often chosen in Switzerland for tax reasons.
The Federal Tax Administration’s rates are flat rates: vehicles, machinery, furniture and IT each have their own, and under the declining balance method the rate is double the straight-line rate. Whoever wants to depreciate faster has to prove the loss of value.
Where to read it
What the software must be able to do
The check is fixed asset accounting: per item the acquisition value, method, rate, residual value, and the automatic depreciation run. Whoever books depreciation by hand once a year has no overview of the asset base.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Cost centre Current assets Debit and credit Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules