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Law No. 15 Of 24 March 1994 On The Depreciation Of Fixed Capital In Tangible And Intangible Fixed Assets

Original Language Title:  LEGE nr. 15 din 24 martie 1994 privind amortizarea capitalului imobilizat în active corporale şi necorporale

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LEGE no. 15 15 of 24 March 1994 (** republished) (* updated *) on the depreciation of capital immobilized in tangible and intangible assets ((updated until 31 August 2003 *)
ISSUER PARLIAMENT




--------- *) The republished text of the law was published in the OFFICIAL GAZETTE no. 242 242 of 31 May 1999. This is the updated form of S.C. "" Territorial Centre of Electronic Computing " S.A. until 31 August 2003, with amendments and additions made by ORDINANCE no. 5 5 of 21 January 2000 ; LAW no. 149 149 of 26 July 2000 ; ORDINANCE no. 81 81 of 28 August 2003 . ----------- ** **) Republicated pursuant to art. IV of Government Ordinance no. 54 54 of 28 August 1997 , published in the Official Gazette of Romania, Part I, no. 225 of 30 August 1997, giving the texts a new numbering. Law no. 15 15 of 24 March 1994 was published in the Official Gazette of Romania, Part I, no. 80 80 of 29 March 1994 and has been amended by Government Ordinance no. 19 19 of 4 August 1995 , published in the Official Gazette of Romania, Part I, no. 188 188 of 18 August 1995 (approved by Law no. 96 96 of 1 November 1995 , published in the Official Gazette of Romania, Part I, no. 257 257 of 8 November 1995), and by Government Ordinance no. 54 54 of 28 August 1997 , published in the Official Gazette of Romania, Part I, no. 225 225 of 30 August 1997 (approved and amended by Law no. 227 227 of 4 December 1998 , published in the Official Gazette of Romania, Part I, no. 473 473 of 9 December 1998). + Chapter I General provisions + Article 1 Economic activity units, hereinafter referred to as economic agents, and which immobilize capital in tangible and intangible assets subject to depreciation, by use or over time, will calculate, register in accounting and will recover their physical and moral wear, to restore the capital employed. These operations are generically referred to as the capital buffer. Non-profit legal entities that have the right, according to the law, to carry out economic activities will cushion the capital immobilized only for those activities carried out for the purpose of obtaining profit and for which, according to the law, they are profit tax payers. Individuals and associations without legal personality, who carry out activities for the purpose of income and who, according to the law, are obliged to lead the obvious in the simple game, will amortize the goods and rights they hold, according to this law ------------- Paragraph 4 of art. 1 1 has been introduced by section 1 1 of art. I of ORDINANCE no. 5 5 of 21 January 2000 , published in MONITORUL OFFICIAL no. 26 26 of 25 January 2000. By goods and rights, provided for in the preceding paragraph, it is understood the fixed assets and intangible assets, as defined in art. 3 lit. b), respectively in art. 7 7 of this law. ------------- Paragraph 5 of art. 1 1 has been introduced by section 1 1 of art. I of ORDINANCE no. 5 5 of 21 January 2000 , published in MONITORUL OFFICIAL no. 26 26 of 25 January 2000. + Article 2 The immobilized capital subject to depreciation is reflected in the patrimony of economic agents through the goods and values intended to serve the activity for a period of more than one year and which is gradually consumed. + Article 3 Tangible assets related to fixed capital are: a) land, including investments for their arrangement; b) fixed assets. Fixed assets are considered the object or complex of objects used as such and cumulatively meets the following conditions: a) has an entry value higher than the limit established by Government decision. This value can be updated annually, depending on the inflation index; b) has a normal duration of use of more than one year. For objects that are used in batches, sets or forming a single body, to their framing as fixed means it is envisaged the value of the whole body, lot or set. + Article 4 They are also considered fixed assets subject to depreciation: a) investments made on fixed assets taken with rent; b) the capacities put into operation in part, for which the registration forms have not been drawn up as fixed assets. They shall be included in the groups in which they are to be recorded, at the value resulting from the sum of the actual expenditure incurred by their achievement; c) investments made for the discovery, in order to capitalize on useful mineral substances, with coal and other deposits that are exploited on the surface, as well as those for the realization of underground mining works for the opening of deposits; d) investments made at fixed assets, in order to improve the initial technical parameters, by increasing the entry value of the fixed means. + Article 5 They are considered tangible assets, but they are not subject to depreciation: fixed assets under public ownership, lakes, puddles, ponds, which are not the result of an investment, as well as land, including forested ones. + Article 6 Not considered as fixed assets: a) engines, appliances and other sub-assemblies of fixed assets, procured for the purpose of replacing used components on the occasion of repairs of any kind, which do not modify the initial technical parameters of the fixed means; b) the tools, instruments and special devices which are used either in the manufacture of certain products in series or in the execution of a particular order, irrespective of their normal value and duration; c) construction and provisional installations; d) animals which have not met the conditions for being passed to adult animals, fattening animals, birds and bee colonies; e) forests; f) investments made for the realization of mining works outside the operating perimeters, as well as those for drilling, executed for explorations, geological and geophysical prospections, drilling for water supply, which did not give results, the wells located in the gas-the head of crude oil deposits, as well as the geological research probes, which have highlighted hydrocarbon accumulations, but which, for objective geologic-technical and economic reasons, cannot be exploited; g) the prototypes, as long as they serve as a model in the execution of series production, including zero series, or are subjected to tests for approval by the manufacturer; h) protective and working equipment, special clothing, as well as bed accessories, regardless of their value and duration of use. + Article 7 Intangible assets related to fixed capital include: a) the expenses of incorporation: taxes and other expenses of enrolment and registration, expenses related to the issuance and sale of shares, prospecting expenses of the market and advertising and other expenses of this nature related to establishment and development of the patrimonial unit; b) research and development expenses; c) expenses related to the discovery of reserves of useful mineral substances, not subject to fixed assets, to deposits placed in service; d) concessions, intangible assets of the nature of the surface and of the fruit, patents and other assimilated rights and values; e) other intangible assets, including software created by economic agents or acquired from third parties. + Article 8 Normal operating times, as well as the classification of fixed assets are approved by Government decision. Their determination will take into account the technical and economic parameters established by the designers and producers through the books or technical documentation of the respective fixed assets, as well as the effects of moral wear. These durations will be reviewed periodically, but not later than 5 years. + Chapter II Calculation of depreciation + Article 9 Depreciation shall be determined by the application of depreciation rates on the entry value of fixed assets and shall be included in operating expenses. + Article 10 The entry value of fixed assets means: a) the entry value related to each fixed means, reassessed in accordance with the legal provisions; b) purchase expenses for fixed assets purchased for consideration; c) the cost of production for fixed assets built or produced by the patrimonial unit; d) the present value for fixed assets acquired free of charge, estimated at their registration in the asset on the basis of the report prepared by experts and with the approval of the board of directors of the economic agent, of the management officer the assets, in the case of non-profit legal entities, or the authorising officer of the budget, in the case of public institutions; e) the contribution value accepted by the parties for the fixed assets entered in the patrimony on the occasion of the association, the merger, etc., according to the statutes or contracts, determined by + Article 11 The depreciation of fixed assets shall be calculated from the month following the commissioning, until the full recovery of the input value, according to normal operating times. The amortization of the fixed assets leased, rented or given in the management location is calculated by the economic agent who has them in the property. The amortization of investments made on the fixed assets leased, rented or taken in the management location shall be recovered by the economic agent who made the investment, during the contract period. Depreciation of buildings and special constructions of mines, salines with extraction in solution by probes, quarries, up-to-date exploits, for solid mineral substances, the duration of use is limited by the duration of the reserves and which cannot receive other uses after the depletion of reserves, as well as investments for the discovery are calculated per unit of product, depending on the exploitable reserve of useful mineral substance. Depreciation per unit of product shall be recalculated: a) of 5 in 5 years with me, quarries, as well as investment expenses for the discovery; b) of 10 in 10 years at saline. Recalculation is made annually if more important changes (of at least 10%) occur in the volume of exploitable reserves. The depreciation of fixed assets subject to an operating lease shall be calculated by the financier, with the possibility of amortization of the entire fixed asset value less the residual value provided for in the contract, during the duration of the contract, but not less than 3 years. -------------- Article 7 (1) art. 11 11 was introduced by the single article of LAW no. 149 149 of 26 July 2000 , published in MONITORUL OFFICIAL no. 354 354 of 28 July 2000. + Article 12 The expenses of the establishment, as well as the research and development expenses, shall be depreciated within a period of no more than 5 years. + Article 13 Patents, licences, know-how, factory, trade and service marks and other similar industrial and commercial property rights, underwritten as a contribution, acquired in other ways, shall be depreciated for the duration prescribed for their use. to the economic agent who owns them. Intangible assets of the nature of the concession, the surface and the usufruct shall be depreciated during the term of the contract. + Article 14 Software created by the economic agent or acquired from third parties shall be depreciated according to the likely duration of use, which may not exceed a period of 5 years. + Article 15 The land is recorded in the accounting at the entrance to the patrimony, at the established value, depending on the quality, surface, location and/or other legal criteria, at the purchase cost or at the value of the contribution in kind, as the case may be. + Article 16 In justified situations, economic agents are exempted from the calculation of depreciation, with the opinion of the general directorate of public finances and state financial control, for the following tangible assets: a) mines passed into conservation or permanently out of service, as well as crude oil and gas wells that are not given in production, on the proposal of the National Agency for Mineral Resources; b) fixed assets of the patrimony of economic agents listed in conservation for a period of more than 30 days; c) works of land improvement and water management, with general service character, intended to defend against floods and remove excess moisture, namely: main levees and canals, dissecting, as well as works of combating soil erosion, regularization of water drainage on slopes and correction of torrents, intended for the defense of agricultural and forestry land and social-economic objectives in the area, navigable fairways, subway tunnels, railway infrastructure, roads, bridges, aqueducts as well as other Communication channels. + Article 17 In case of full non-recovery, on the way of depreciation, of the entry value of fixed assets out of service, economic agents shall ensure the coverage of the unamortized value from the amounts resulting from their recovery. The remaining uncovered difference shall be included in exceptional, non-tax-deductible expenses over a period of not more than 5 years, or diminishing equity, in compliance with the legal provisions. The duration of the recovery and the annuities of coverage of the unamortized value shall be determined by the management board of the economic agent, respectively by the asset management officer, in the case of non-profit legal entities, defined to art. 1 1 para. 3. + Chapter III Amortisation regimes + Article 18 Economic agents shall depreciate the fixed assets according to the provisions of this law, using one of the following depreciation regimes: A. Linear depreciation-is achieved by the uniform inclusion in the operating expenses of fixed amounts, established in proportion to the number of years of the normal duration of use of the fixed means. The linear depreciation is calculated by applying the annual rate of depreciation to the entry value of fixed assets. B. Degressive depreciation-consists in the multiplication of linear damping quotas with one of the following coefficients: a) 1.5, if the normal duration of use of the fixed buffer means is between 2 and 5 years; b) 2,0, if the normal duration of use of the fixed buffer means is between 5 and 10 years; c) 2,5, if the normal duration of use of the fixed means of amortisation is more than 10 years. These coefficients can be modified only by Government decision, at the proposal of the Ministry of Finance C. Accelerated depreciation-consists of the inclusion, in the first year of operation, in the operating expenses of a depreciation of up to 50% of the entry value of that fixed means. The annual depreciation for the following years shall be calculated at the amount remaining to be depreciated, after the linear regime, by reference to the number of years of use remaining. + Article 19 The powers of approval of the use of the linear or degressive depreciation regime shall return to the management board of the economic agent, respectively to the management officer of the patrimony, in the case of non-profit legal entities to art. 1 1 para. 3. The use of the accelerated depreciation regime is approved by the general direction of public finances and state financial control, at the proposal of the board of directors of the economic agent or of the patrimony management officer. + Chapter IV Accounting and destination of depreciation of fixed assets + Article 20 Economic agents, regardless of the form of organization and type of property, as well as non-profit legal entities have the obligation to highlight in accounting, in distinct accounts, fixed assets and their depreciation. ------------- Paragraph 2 of art. 20 20 was repealed by lit. b) a art. 26 of ORDINANCE no. 81 81 of 28 August 2003 , published in MONITORUL OFFICIAL no. 624 624 of 31 August 2003. + Chapter V Removal of fixed assets from operation + Article 21 The removal from operation of fixed assets is made with the approval of the board of directors of the economic agent, respectively of the patrimony management officer, in the case of non-profit legal entities defined in art. 1 1 para. 3. ------------- Paragraph 2 of art. 21 21 was repealed by lit. b) a art. 26 of ORDINANCE no. 81 81 of 28 August 2003 , published in MONITORUL OFFICIAL no. 624 624 of 31 August 2003. At public institutions whose leader has the rank of tertiary authorising officer of the budget, the removal of fixed assets from operation will be made with the approval of the secondary authorising officer of the budget. ------------- Paragraph 3 of art. 21 21 has been introduced by section 2 2 of art. I of ORDINANCE no. 5 5 of 21 January 2000 , published in MONITORUL OFFICIAL no. 26 26 of 25 January 2000. + Article 22 When removing the fixed assets that have not been fully depreciated economic agents, as well as the non-profit legal entities will proceed in accordance with the provisions of art. 17 17 and 21. + Article 23 When the fixed assets belonging to the economic agents to which the state holds more than 50% of the share capital will be taken out of service, the maximum recovery of the components, sub-assemblies and component parts will be aimed at maximum new fixed, as spare parts within the respective unit or by sale, on the basis of public auction, organized according to the law. + Chapter VI Transitional and final provisions + Article 24 It constitutes contraventions to the rules on the calculation and registration of depreciation of capital immobilized in tangible or intangible assets the following facts, if not committed under such conditions that, according to the criminal law, be considered Offences: a) registration as a fixed means of objects which, according to this law, do not fall under this category; b) calculation and recording in accounting of the depreciation of fixed assets exempted according to art. 5 5; c) application of normal durations of use of fixed assets other than those established according to the legal provisions; d) the registration of entry values of fixed assets other than those established according to the legal provisions; e) the modification, during the normal period of operation of the fixed means, of the duration and of the depreciation regime, established according to art. 8 8, 18 and 19. + Article 25 The contraventions provided in art. 24 24 shall be sanctioned as follows: a) those of lit. c) and d), with a fine from 3,000,000 lei to 10,000,000 lei; b) those of lit. a), b) and e), with a fine from 5,000,000 lei to 15,000,000 lei. The amount of these contraventions will be updated by Government decision, depending on the inflation index. + Article 26 The contraventions provided for in this Law shall apply to the Law no. 32/1968 on the establishment and sanctioning of contraventions, except art. 25-27. The finding of contraventions and the application of sanctions are made by the specialized bodies of the Ministry of Finance + Article 27 The declassification and scrapping of material goods, other than fixed assets, are a matter for the boards of directors of economic agents, respectively of the patrimony management officer. The declassification and scrapping of material goods, other than fixed assets, belonging to public institutions, are a matter for the authorising officer of the budget. + Article 28 The Government will approve the classification and normal operating times of fixed assets within 60 days from the publication in the Official Gazette of Romania of this Law. The Ministry of Finance will elaborate, within the deadline provided for in 1, methodological norms for the application of this law. + Article 29 This Law shall apply from 1 January 1994 *). On the same date is repealed Law no. 62/1968 ,, as amended, H.C.M. no. 139/1969 , Decree no. 49/1982 , Decree-Law no. 50/1990 ,, as well as any other provisions to the contrary. ---------- *) See also the dates of entry into force of the amending normative acts. ---------