In a letter dated 17 August 2012, the Ministry of Finance of the Russian Federation (the "Ministry") commented on how to accrue depreciation on fixed assets.
According to the Ministry, in order to start accruing depreciation on fixed assets, the rights of which are subject to state registration, it is necessary to fulfill two conditions: (i) there must be documentary evidence of the submission of documents for state registration of such rights and (ii) the fixed asset must have been commissioned. Depreciation commences on the 1st day of the month following the month of the commissioning of the fixed assets.
However, on 30 October 2012, the Presidium of the Supreme Commercial Court of the Russian Federation (the "SCC") issued a ruling that overturned the clarifications provided by the Ministry. The judges of the SCC supported the position of those courts that deemed that depreciation accrual starts when the fixed asset had been commissioned. Prior to this, there was some ambiguity regarding the issue. The controlling authorities, and sometimes the courts, had stated that to accrue depreciation on real estate it was necessary to follow both of the conditions mentioned above. By issuing this ruling, the SCC has put an end to the argument.
Therefore, in order to start accruing depreciation on an object commissioning suffices, and there is no requirement for documentary evidence of the submission of documents for state registration of the rights. The respective clarifications of the Ministry should be applied in part, where not contradicting the conclusions of the SCC.
[Letter No. 03-03-06/1/421 of the Ministry of Finance of the Russian Federation, dated 17 August 2012; Ruling No. 6909/12 of the Presidium of the Supreme Commercial Court of the Russian Federation, dated 30 October 2012]