19 Bulletin UASVM Horticulture, 67(2)/2010 Print ISSN 1843-5254; Electronic ISSN 1843-5394 Accounting and Tax Depreciation. Depreciation Schemes Ileana ANDREICA Faculty of Horticulture, University of Agricultural Sciences and Veterinary Medicine, 3-5 Manastur Street, 400372, Cluj-Napoca, Romania; iandreica@usamvcluj.ro Abstract. Depreciation is the systematic allocation of the depreciable value of an asset over its useful life. In practice it is used both in terms of accounting depreciation and tax legally. Accounting depreciation is calculated based on an amortization plan, prepared for the period from the date of service of its tangible assets and full recovery of the value of their input. Tax depreciation is calculated from the month following the depreciable tangible asset is put into operation, until full recovery of input values, as useful life established in the “Catalogue of the classification and useful life of fixed assets”. Entities depreciated tangible assets using one of these schemes depreciation: Linear depreciation, diminishing depreciation and accelerated depreciation. Theory and practice recommend that depreciation regime used to be logically and systematically. Practicing one depreciation method or another, by a society, is made in the manner permitted by law, the tax benefits that can be recovered, the investment policy of the company etc. Choosing diminishing or accelerated system is suitable for businesses who want to obtain benefits or to obtain investment in early years because depreciation is diminishing rapidly may defer payment of part of tax and take advantage of such depreciation. Depreciation regime chosen should reflect the reduced ability to service the property. Existence of several accounting methods for finding and recording depreciation requires of the enterprise an accounting option. Given that an enterprise has a choice regarding amortization, the interest is investment; interest competes with the state tax. Keywords: accounting depreciation, tax depreciation, duration of use, depreciation regime, legislation INTRODUCTION Tangible assets lose some of their use value due to their use, the action of natural agents, technical progress. This physical and value depreciation is called wear. The expression value of wear, which is sequenced included in the costs, is called depreciation. Depreciation expense is a non-monetary cost and has the effect of reducing income of a year (Pantea and Bodea, 2009). Depreciation is the systematic allocation of the depreciable value of an asset over its useful life (Dutescu, 2001). Given this general interpretation, there are many views on depreciation. Interest in accounting has the following three: 1. Depreciation as a process of correction of property value. Depreciation is the loss of value suffered by reason of depreciation of assets over time, the physical wear and obsolescence. From this interpretation, depreciation is to correct the value of fixed assets to return them to their real value. Findings irreversible depreciation is difficult as assessing future loss of each good, which is dependent on usage of the property, by way of maintenance and repair, technical progress. 2. Depreciation like the transfer process or the cost sharing assets on expenditure year. Discussed the allocation process, depreciation is controllable resource resulting from past, which produces future benefits (Ristea, 2001).