LIFO is not permitted for inventory valuation. Provision for bad debt accounts are not allowed, and write-offs are taken as they occur. Depreciation is a percentage of value based on year of purchase. The accounting period cannot exceed 12 months, but has no other stipulations. Commonly the financial and tax periods are the same.
Historical cost is the most prevalent method of valuing assets at the present time.
If the asset is valued at higher than cost, the additional amount is listed on the balance sheet as a cost unable to be allocated. FIFO or Average Cost methods are used for valuing inventory, which includes full costing for indirect manufacturing and other overhead. LIFO is not permitted, and LCM, FIFO and Average Cost are all acceptable for tax purposes. ASB is investigating impairment reporting on assets, and a recently issued discussion paper advocates periodic revaluation of fixed assets. Depreciation is over the useful life of the asset down to its salvage value.