Fixed asset depreciation in Honduras: method, useful life and recording
Spread the cost of an asset over the years you use it, without mixing up accounting and tax depreciation.
Related free calculator: Straight-line depreciation
The straight-line calculation
- Cost of the asset: purchase price plus what is needed to get it ready for use.
- Residual value: what you expect to recover at the end of its useful life (it can be zero).
- Useful life: how long you expect to use it, in months.
- Monthly charge = (cost minus residual value) ÷ months of useful life.
Example: equipment of L 36,000, with no residual value and a useful life of 3 years (36 months), is depreciated L 1,000 per month.
Land is not depreciated.
Reference useful lives
PymesPros suggests as a reference the useful lives that the Income Tax Law accepts without additional justification. IFRS for SMEs asks you to estimate each asset’s real useful life, so these are a suggestion and your accountant can set another if the way the asset is used calls for it.
| Type of asset | Reference useful life |
|---|---|
| Computer equipment | 3 years |
| Vehicles | 5 years |
| Furniture, machinery and equipment | 10 years |
| Installations | 20 years |
| Buildings | 40 years |
Accounting depreciation and tax depreciation
Accounting depreciation aims to reflect the real use of the asset under IFRS. Tax depreciation uses the rates the law provides to calculate the tax. They do not have to match, and the difference is taken into account when preparing the return. That is why the tax calculator asks you for the annual rate and does not assume a category: confirm it before applying it.
How it is recorded
- Each month: depreciation expense on the debit side, accumulated depreciation on the credit side.
- When the asset is added: it is recorded with its date, cost, useful life and residual value.
- Statuses: in use, fully depreciated (the charge reaches zero and the asset stays in use) and written off (sold, lost or scrapped).
- Remaining months: value left to depreciate divided by the current monthly charge.
A fully depreciated asset that is still in use does not disappear: it stays in the records until it is written off.
How PymesPros helps
PymesPros keeps the fixed asset register with each useful life, calculates the monthly charge and the remaining months, posts the month’s depreciation and marks the asset’s statuses. To simulate first, use the free straight-line depreciation and tax depreciation calculators (with a confirmed rate).
This guide is informational and does not replace the advice of a licensed public accountant. Rates, ceilings and dates are adjusted by the authorities from time to time: confirm them at the official source before applying them.
Frequently asked questions
When does an asset start to be depreciated?
From when it is available for use, not from when it is paid. Ask your accountant about the policy you will apply consistently.
What do I do with an asset I no longer use?
It is written off with its justification: it is removed from cost and from accumulated depreciation, and the gain or loss, if any, is recognized.
Is the useful life in the law mandatory for accounting?
Not necessarily. IFRS asks you to estimate the real useful life. The one in the law is a reference for tax.
Can I change an asset’s useful life?
It can be reviewed if circumstances change. The change applies going forward and must be documented.
Keep reading
Annual income tax (ISR) return for a company in Honduras: how to close the books
From accounting profit to net taxable income, and why the year’s tax is recorded in that year and not when you pay it.
Read the guide →Monthly accounting close for small businesses
A checklist to close the month without surprises and deliver financial statements on time.
Read the guide →Inventory and kardex in Honduras: average cost or FIFO
The record that backs your cost of sales, the two allowed methods and how to know when to buy.
Read the guide →Accounting and bookkeeping
Books that are up to date, reconciled and ready for your bank, the tax authority or your shareholders, without building an accounting department.
See accounting →Want to see it working in your company?
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