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V1309-16 31 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · deterioro de valor

Linear distribution of asset impairment losses across multiple financial years is not permitted

A company requested clarification on whether it could linearly distribute the impairment loss of certain properties over the 2008 to 2014 financial years. The Directorate General for Taxes (DGT) ruled that impairment losses must be recognised in the financial year in which the impairment occurs.

The question raised

Is the linear distribution of the loss in value between the fiscal years 2008 to 2014 admissible?

The DGT's ruling

Impairment losses are tax-deductible when the net book value of the asset exceeds its recoverable amount. To be deductible, they must be justified, recorded in the accounts, and allocated to the fiscal year in which they were accrued. The linear distribution of the loss across fiscal years is not admissible, as the allocation must respect the moment in which the impairment occurs.

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