Here in the good old Mother country we have to agree depreciation of business assets with Her Majesty's Revenue & Customs
What absolute codswallop!
A business can depreciate its assets at whatever rate it chooses but only to the extent that the business's auditor (if it is required to have one) is satisfied that the depreciation rates used are reasonable.
The taxman (my very good friends at HM Revenue & Customs) will "disallow" depreciation for tax purposes (whether it be income tax for self-employed/partnerships or corporation tax for limited and public companies). Instead he or she gives the business "capital allowances" on its assets. The rules regarding these allowances are set in legislation and are not subject to "agreement". There may be circumstances where the Taxes Acts are ambiguous and in those circumstances, quite often a different Inspector will have a different interpretation of the legislation. In rare circumstances, a case could be heard before the Commissioners in order to decide the correct taxation treatment.
The reason for this is that one business (making equal gross profit) could decide to depreciate its helicopter over 20 years (thus making a bigger profit since the depreciation charge is a smaller amount) whilst the other could decide to depreciate over five years making less profit.
This net profit after depreciation is oonly a paper figure and so the company with the five year depreciation rate would pay less tax on a lower profit. So, HMRC "add back" the depreciation charge to the net profit and, after the capital allowances (which are fixed for all businesses), tax is paid on that figure.
The main capital allowance given is 25% on reducing balance, i.e. buy a helicopter for £100,000, after one year its tax book value is £75,000, after two tears £56,250, after three £42,188 etc etc. This allowance is given on all general assets (except expensive company cars, land and buildings etc).
Cheers
Whirls