For a foreign-owned manufacturing or asset-heavy entity in Türkiye, fixed assets are one of the largest balance-sheet items — and one of the most commonly mismanaged. Turkish tax depreciation follows its own rules; the group expects IFRS-based depreciation; revaluation mechanics appear and change with the macro environment; and the physical register often drifts from reality. This guide explains the mechanics a foreign owner should understand and the ERP capabilities that keep fixed assets under control.
Note: Depreciation rates, useful lives, revaluation rules and inflation-accounting mechanics are set by Turkish tax legislation and change. Always confirm current treatment with your CPA (SMMM) and tax counsel.
Why fixed assets get complicated here
Three layers stack:
1. Local tax depreciation (VUK) Turkish tax law specifies depreciation methods and useful lives for asset categories. This drives the local statutory books and the tax base.
2. Group / IFRS depreciation Headquarters consolidates under IFRS, where depreciation is based on the asset's expected useful life and pattern of consumption — which may differ from the tax-prescribed life.
3. Revaluation and inflation accounting In high-inflation periods, asset book values lag real values badly. Turkish legislation has at times provided revaluation mechanisms, and when Türkiye meets hyperinflation criteria under IFRS, IAS 29 inflation accounting applies for group reporting. These two systems differ.
A serious ERP runs parallel asset ledgers so both the VUK view and the IFRS view derive from the same asset records.
The fixed asset register: the foundation
Every asset needs a record:
- Description, make, model, serial number
- Acquisition date and cost
- Useful life and depreciation method (per ledger)
- Location (site, department, room)
- Custodian (who is responsible)
- Warranty and maintenance history
- Photo and invoice image
- Tag / barcode number
Without a clean register, depreciation is wrong, physical counts are impossible, and custody is untraceable.
Parallel depreciation
The asset module should compute depreciation independently for each ledger:
- VUK ledger — tax-prescribed method and life, drives statutory accounts
- IFRS ledger — useful-life based, drives group reporting
- Both from one asset record; never re-keyed
Methods to support: straight-line, declining balance, and pro-rata (partial-period) depreciation for assets acquired mid-year.
Revaluation and inflation accounting
When applicable, the ERP should:
- Apply revaluation coefficients or index-based adjustments
- Recalculate the depreciation base and produce a new schedule
- Keep the pre- and post-revaluation values both visible (auditors ask)
- Handle the VUK revaluation and the IFRS IAS 29 treatment separately
The exact mechanics depend on current legislation — run this with your CPA. The ERP's job is to execute whatever treatment is decided, consistently and with an audit trail.
Physical inventory: reconciling register to reality
The register and physical reality drift:
- Sold or scrapped assets remain on the list
- Stolen or lost equipment keeps generating depreciation
- Assets moved between departments show wrong locations
A periodic physical count (at least annually) fixes this. ERP-supported counting:
- Barcode / QR tag scanning via mobile device
- "On register, not found" and "found, not on register" reports
- Instant location and custodian updates
Disposals
When an asset is sold, scrapped or donated, a proper disposal flow:
- Marks the asset for disposal
- Computes accumulated depreciation and net book value
- Records the proceeds and calculates gain/loss
- Generates the accounting entry automatically
- Closes the asset record
Skipping this means depreciation keeps running on assets you no longer own — a common source of overstated expense and misstated balance sheet.
Capex and project linkage
Assets often arise from capital projects. The ERP should:
- Accumulate costs in a CIP (construction-in-progress) account
- Capitalize to a fixed asset when the project completes
- Link the asset back to the originating project and budget
The 6 common failures
1. Register in Excel, years out of date Doesn't reflect reality; depreciation runs on phantom assets.
2. No custody tracking Equipment whereabouts unknown; loss and misuse undetected.
3. Disposed assets still depreciating No disposal entry, so expense and balance sheet are both wrong.
4. Tax and management depreciation conflated VUK rates used for management reporting lead to wrong decisions.
5. No physical count, ever The register and reality diverge until they're unrelated.
6. Revaluation done inconsistently Applied once, never reviewed, or applied without CPA coordination — audit findings follow.
ERP capability checklist
- Detailed asset register (photo, invoice, warranty, maintenance)
- Parallel depreciation (VUK + IFRS) from one record
- Multiple methods (straight-line, declining, pro-rata)
- Revaluation / inflation-accounting support
- Barcode/QR mobile physical count
- Custody and location tracking
- Disposal workflow (gain/loss + auto entry)
- CIP and capex-project linkage
- Full audit trail on asset changes
- CPA shared view
Birasyo's fixed asset approach
Birasyo ERP's fixed asset module:
- Detailed asset register with photo, invoice and maintenance history
- Parallel VUK + IFRS depreciation from a single asset record
- Straight-line, declining-balance and pro-rata methods
- Revaluation and IAS 29 support (executed per your CPA's guidance)
- Barcode/QR mobile physical inventory
- Custody and location tracking
- Disposal workflow with automatic gain/loss and accounting entry
- CIP and capex-project linkage
- Full audit trail; CPA shared view
If you operate an asset-heavy Turkish entity and want a focused review, book a session.
Sources
- VUK (Vergi Usul Kanunu) — depreciation and revaluation provisions
- IFRS (IAS 16, IAS 29) — property, plant and equipment; inflation accounting
- Türkiye Public Oversight Authority — TFRS materials
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