Auditable Bookkeeping: Depreciation Schedules and Asset Impairment for Mining Hardware

One of the most frequent points of friction during South Korean corporate tax audits is the treatment of specialized mining hardware. Unlike standard office computers that follow conventional 5-year straight-line depreciation, high-intensity ASIC units experience rapid technological obsolescence and continuous 24/7 silicon degradation.

Selecting an Appropriate Depreciation Schedule

Under the Korean Corporate Tax Act (법인세법), machinery used in specialized computational processing can be categorized under specific industrial equipment asset classes with statutory useful lives ranging between 2 to 3 years using declining balance or straight-line methods.

Choosing the declining balance method allows the enterprise to recognize the heaviest depreciation expense during the machine's most productive first twelve months, closely aligning accounting expense with actual economic value extraction.

Recognizing Asset Impairment Following Network Halving Events

When global network difficulty increases or block subsidy reductions occur, older generation machines (e.g., equipment operating above 30 J/TH) may become unprofitable at standard industrial electricity rates. Under Korean International Financial Reporting Standards (K-IFRS 1036), companies must perform asset impairment tests and write down carrying book values to recoverable amounts.

In our accounting curriculum, we provide comprehensive Excel modeling tools that automate these impairment calculations based on difficulty projections, power tariffs, and secondary hardware market benchmarks.