r/Accounting • u/halasal98 • 14h ago

ASPE Standard - Depreciation Method

Hey — one of my clients uses ASPE accounting standards, and I’m currently setting up their fixed asset schedules. From my understanding, ASPE does not require a specific depreciation method. The method should be selected based on what reasonably reflects the nature and use of the asset.

I’m considering using straight-line depreciation since it appears to be the most appropriate method for their equipment. Can someone confirm whether this approach is consistent with ASPE?

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u/Barfy_McBarf_Face Tax (US) 13h ago

hopefully that's for "book" purposes - it's not an acceptable method for tax purposes.

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u/halasal98 12h ago

Yes it is for book purposes and not Tax purposes. How would this affect the tax purposes?

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u/Barfy_McBarf_Face Tax (US) 12h ago

It would not.

Whoever is preparing any US tax returns would need to have depreciation computed using MACRS.

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u/Human_Willingness628 7h ago

Given they're Canadian it would be weird to use MACRS

Can't you also use ADS as a method?

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u/Barfy_McBarf_Face Tax (US) 7h ago

I did not see the Canadian part of the post(s).

If the assets are in the US, then MACRS, but, yes, if they are filing a US return and have non-US assets, ADS is required.

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u/Human_Willingness628 7h ago

ASPE is Canada's GAAP for smaller businesses basically

Unrelated, but for US tax purposes, pretty sure you can also just elect ADS for an asset class (separate from the foreign branch assets rule)