The Cabinet of Ministers of Ukraine has adopted a decision to introduce from 1 January 1997 new rules for depreciation of fixed assets. A new concept of asset groups (pools) will replace the previous system of depreciation norms applied to each specific fixed asset item (of which there are thousands). Annual depreciation charges will be applied on the basis of the reducing balance method to three groups of fixed assets. The depreciation charges are calculated as follows:
- Group 1 (buildings) - 5%
- Group 2 (transport vehicles, office equipment, electric appliances, information network systems including computers) - 25%
- Group 3 (all other assets) - 15%.
Intangibles may be depreciated by using the straight line method for the period of useful asset life but not longer than 10 years. For newly purchased Group 3 assets accelerated depreciation is allowed during a seven year period by election. The value of fixed assets is subject to automatic re-valuation if the quarterly
