The environmental manager will be the one to define the waste and emission treatment
facilities of the company whereas the accountant may subsequently determine their purchase
value and annual depreciation.
As tax laws are not always equally relevant in all countries in determining how accounting
profits (in financial reporting) are defined and determined, the depreciation charged in financial
reports might be irrelevant to the determination of taxable profits. In the United Kingdom, the
depreciation charged in financial reports is added back to the accounting profit stated in those
reports, then an alternative calculation (termed “capital allowance”) is done, based on standard
Inland Revenue rules, and deducted in order to compute taxable profits. This means that
companies can (and should) charge depreciation in their accounts at the amount that they
believe really reflects the useful lives of their assets, undistorted by any tax consideration.