Depreciation of assets is a way of including in the project budget the wear of assets that the beneficiary already owns and uses for project activities. It can be applied instead of acquiring new assets, which tends to be advantageous, for example, for instruments, laboratories, or production equipment. The conditions are strict, however. Only the proportional part of the depreciation corresponding to the extent and time the asset is used on the project is eligible, and this must be demonstrated by a record of use, not by an estimate. The asset must not have been acquired from public funds – if it was purchased using another subsidy, depreciating it into the project would amount to double financing. Depreciation is applied exclusively for the period of project implementation and in accordance with the beneficiary's depreciation schedule and accounting regulations. The asset card, the depreciation schedule, the accounting entries for the depreciation, and the basis for calculating the proportional part must be documented.
See also: Eligible expenditure, Double Financing, Analytical Accounting Records for the Project.
