To provide detail guidance on the implementation on regulations pertaining to depreciation and amortization of tangible and intangible assets, as discussed in Government Regulation No. 55 Year 2022, The Minister of Finance issued on July 13, 2023 a regulation in the form of Minister of Finance Regulation (“MoF”) No. 72 Year 2023. This derivative regulation regulates in detail the calculation of depreciation of tangible assets and/or amortization on intangible assets.
Key points that need to be known regarding this regulation:
- Additional industry categories and kinds of non-building tangible assets in the grouping of tangible assets;
- Notification mechanism for useful life of >20 years for buildings;
- New rules regarding repair costs with a useful life of >1 year to be charged through depreciation on the tangible asset concerned;
- New rules regarding the treatment of residual value of assets that receive insurance reimbursement;
- Additional regulations on depreciation and amortization for certain business fields (forestry, plantation, and farming).
This MoF Regulation is effective starting July 17, 2023.
SS – 2023 – PMK 72 Tahun 2023