Fixed and intangible asset accounting in Uzbekistan

Fixed assets are accounted for under NAS 5, while intangible assets are governed by NAS 7. The accountant identifies the asset, initial cost and useful life, selects a depreciation or amortization method, and documents commissioning, inventory checks and disposal. Classification and depreciation for corporate income tax must be checked separately.

In brief:

• A fixed asset is a tangible item used for more than a year; an intangible asset has no physical form and must be identifiable.
• Initial cost includes the price and direct costs of bringing the asset to working condition.
• Routine repairs are expensed, while modernization that increases future benefits raises the asset’s cost.
• Accounting and tax criteria differ, so the same asset may produce different depreciation amounts.
• The practical result is a separate record for every asset, supported cost and methods fixed in the accounting policy.

Updated: 04 September 2026

What qualifies as a fixed asset

A fixed asset is a tangible asset (para. 3, NAS 5) that an entity uses for more than a year in production, work, services, administrative or social and cultural functions, or leases out. Short-term inventory, goods held for resale and consumable materials do not meet this definition.

An item is recognized when future economic benefits are probable and its initial cost can be measured faithfully. These recognition conditions (para. 8, NAS 5) apply together. Management may set entity-specific criteria (para. 4, NAS 5) and group classifications in the accounting policy.

The unit of account is an inventory object (para. 6, NAS 5). A set of structurally connected items may be accounted for as one asset. If independently functioning components have different useful lives, each component is accounted for separately. The asset record should therefore connect the item with its location, responsible person, initial cost, depreciation and supporting documents.

How to determine the initial cost of a fixed asset

A purchased fixed asset is measured at the supplier’s price together with acquisition costs (para. 13, NAS 5). Cost includes registration fees and duties, customs payments, non-refundable taxes, information and consulting services, insurance of delivery risk, intermediary fees, installation, assembly, adjustment, commissioning and other direct costs of bringing the item to working condition.

Bank services, letters of credit, transfers, currency conversion, and preparation and registration of the contract are excluded from cost and expensed in the period. This cost exclusion (para. 13, NAS 5) separates expenditure on the asset from expenditure on settlement and transaction administration.

For a self-constructed asset, the entity accumulates actual construction or production expenditure. Abnormal waste of materials, labor and other resources is not capitalized. When payment is deferred, the asset is measured at the immediate cash price, while the difference is recognized as a finance expense over the deferral period.

How to account for repairs, modernization and revaluation

Current, medium or major repairs that merely keep the asset in working condition and preserve the originally expected benefits are charged to period expenses or production cost. Such maintenance expenditure (para. 50, NAS 5) does not increase the carrying amount.

Extensions, additional equipment, reconstruction, modernization and technical re-equipment increase initial cost if useful life, capacity, operating quality or another original performance measure rises after the work. The increase in performance (para. 26, NAS 5), rather than the contract’s label, distinguishes capitalized expenditure from repairs.

After recognition, an entity chooses the historical-cost model or the revalued-cost model. The selected measurement model (para. 12, NAS 5) is fixed in the accounting policy. A revaluation covers the entire relevant group and is performed often enough to prevent the carrying amount from differing materially from fair value.

How fixed-asset depreciation is calculated

Depreciation begins on the date the item is recognized as a fixed asset and commissioned. It ends when the depreciable amount is fully allocated or the asset is derecognized. This is the depreciation period (para. 33, NAS 5). Idle time alone does not stop depreciation, except for prescribed conservation and a complete shutdown for modernization or restoration.

NAS 5 permits four methods (para. 39, NAS 5):

• straight-line;
• units of production, proportionate to work performed;
• double-declining balance;
• sum-of-the-years’ digits, or the cumulative method.

Except under the units-of-production method, depreciation is recorded monthly at one twelfth (para. 43, NAS 5) of the annual amount. The method follows the expected pattern of benefits and is applied consistently to similar assets.

Example. An entity commissions equipment with an initial cost of UZS 120,000,000, an assumed residual value of UZS 0 and a useful life of five years. Under straight-line depreciation, the annual charge is UZS 120,000,000 / 5 = UZS 24,000,000, and the monthly charge is UZS 24,000,000 / 12 = UZS 2,000,000.

What qualifies as an intangible asset

An intangible asset is an identifiable item (para. 5, NAS 7) without physical substance that is held for long-term use in operations or administrative functions. It is separable and transferable or arises from contractual or other legal rights.

Recognition requires all of the following: no physical form, use for more than 12 months, no intention to resell, properly executed evidence of the asset and exclusive right, identifiability, and a value of at least 50 BRV (para. 6, NAS 7), where BRV means the base calculation unit. Management may set a lower value threshold for the reporting period. At the current token value, 50 BRV equals UZS 22.000.000.

If every criterion is met, intangible assets may include the following rights (para. 10, NAS 7):

• exclusive rights to inventions, industrial designs and utility models;
• rights to software and databases;
• rights to integrated-circuit topologies;
• rights to trademarks, service marks and appellations of origin;
• rights to selection achievements;
• goodwill;
• rights to use natural resources;
• land-use rights;
• other rights meeting the intangible-asset criteria.

Employees’ intellectual and business qualities are not intangible assets. Embedded software without which equipment cannot operate is accounted for with the fixed asset; standalone software supported by an exclusive right may be a separate intangible asset. These asset distinctions (para. 11, NAS 7) are applied before an account is selected.

How to determine intangible-asset cost and account for development

A purchased intangible asset includes the price paid for the right, registration and patent fees, customs payments, non-refundable taxes, consulting services, intermediary fees, insurance and direct costs of preparing the asset for use. This cost composition (para. 15, NAS 7) is supported by the contract, acceptance document, payment evidence and registration evidence.

For an internal project, the research and development stages are separated first. Research expenditure (para. 10, NAS 11) is recognized as an expense in the period and cannot later be reinstated as an asset.

Development expenditure is capitalized only when the complete set of criteria (para. 12, NAS 11) is met:

• the product or process is defined and its expenditure can be identified separately and measured faithfully;
• completion is technically feasible;
• the result is intended for production, sale or use;
• a market exists, or future benefits from internal use are supported;
• resources and capacity are available to complete the project and market or use the result.

How to amortize an intangible asset

Amortization begins on the first day of the month after the month in which the intangible asset is recognized. It ends on the first day of the month after the depreciable amount is fully allocated or the asset is derecognized. This starting point (para. 41, NAS 7) differs from the fixed-asset rule.

Useful life is set on recognition by reference to the term of the patent, certificate, contract and other legal restrictions, or to the expected period of benefits. If useful life cannot be determined, the standard prescribes five years (para. 47, NAS 7), but not beyond the entity’s operating term.

The same methods (para. 48, NAS 7) are available: straight-line, units of production, double-declining balance and sum-of-the-years’ digits. One method is used for a similar group. Useful life is reviewed annually (para. 56, NAS 7), and the method changes when the expected pattern of benefits changes materially.

Example. An entity acquires an exclusive software right for UZS 18,000,000 and pays UZS 2,000,000 in registration costs. Initial cost is UZS 20,000,000. This is below 50 BRV, or UZS 22.000.000, but the accounting policy sets a lower threshold of UZS 15,000,000. With a five-year life, straight-line amortization is UZS 20,000,000 / 5 / 12 = UZS 333,333.33 per month.

How to derecognize fixed and intangible assets

A fixed asset is derecognized for the following reasons (para. 53, NAS 5): liquidation, sale, exchange, transfer without consideration, contribution to share capital, transfer under finance lease, shortage or loss, settlement with a withdrawing founder, and a property contribution to a nongovernmental nonprofit organization.

An intangible asset is derecognized on liquidation, sale, exchange, transfer without consideration, contribution to share capital, settlement with a withdrawing participant, shortage or loss. The disposal grounds (para. 67, NAS 7) are the starting point for documenting the transaction.

For the liquidation of an intangible asset, management establishes a commission that determines unusability, reasons for disposal, responsible persons and whether parts of the result can still be used. Its decision is recorded in an act. Derecognition is prohibited (para. 9, Intangible Asset Write-off Regulation) until the act is approved. The financial result is disposal income less carrying amount, indirect taxes and related expenditure, adjusted for the revaluation reserve.

Which accounts and entries are used

The working chart of accounts should separate capital expenditure from recognized assets and accumulated depreciation or amortization. NAS 21 provides standard correspondences that an entity details in its accounting policy.

Initial cost, accumulated depreciation or amortization, and the disposal result are calculated before posting and connected to one package of primary documents. Analytical records are maintained for each inventory object and each exclusive right.

When to perform an inventory check

Fixed assets are inventoried at least once every two years (para. 5, NAS 19), and library collections once every five years. The same minimum two-year frequency applies to intangible assets. There is also a general mandatory check before annual financial statements, except for property checked after 1 October of the reporting year.

For fixed assets, the commission performs a physical inspection and records the name, purpose, inventory number and main technical or operating characteristics. This physical inspection (para. 24, NAS 19) is reconciled to asset cards and registers.

For intangible assets, the commission checks evidence of the right to use the asset and whether it was recognized in the balance sheet correctly and on time. This is a documentary check (para. 29, NAS 19), because there is no physical item to inspect.

Differences are documented in reconciliation statements, and a proposed treatment is submitted to management. Inventory results (para. 70, NAS 19) are recorded in the accounts and reports for the month of completion, while annual-check results are included in the annual financial statements.

How accounting differs from tax treatment

Tax accounting uses accounting records and other documentary evidence as its starting point (art. 76, Tax Code), but applies its own definitions, values, useful lives and depreciation rates. An accounting entry therefore does not make the tax value automatically identical.

For corporate income tax, a fixed asset is taxpayer-owned property costing more than 50 BRV (art. 306, Tax Code) on recognition and used for more than 12 months in production, services or administration. The taxpayer may set a lower threshold in its tax accounting policy.

The tax definition of an intangible asset covers intellectual-property objects and similar rights that are used for more than 12 months, can produce future benefits and are documented. These tax criteria (art. 307, Tax Code) are checked separately from NAS 7.

Example. Equipment costs UZS 20,000,000. It meets the entity’s accounting-policy criteria and is recognized as a fixed asset. For corporate income tax, 50 BRV equals UZS 22.000.000, so the item does not reach the threshold unless a lower tax threshold has been adopted. Its accounting and tax depreciation differ, and the difference is tracked in an analytical register.

The broader selection of standards and the working chart of accounts are explained in accounting under NAS. Methods and value thresholds are then fixed in the entity’s accounting policy.

What changed in 2025–2026

• A new edition of NAS 21, containing the chart of accounts and its application instructions, has applied since 1 January 2025.
• Presidential Resolution No. PP-282 of 15 September 2025 introduced the register of public-interest entities. An entity entered in the register moves to IFRS on 1 January of the next year and later publishes IFRS financial statements with an audit opinion under the prescribed schedule.
• NFRS 2 will take effect only on 1 January 2027. Until then it is a future rule, not a replacement for the current NAS 5 and NAS 7.

What to put in the accounting policy

For fixed and intangible assets, specify recognition criteria and value thresholds, group classifications, units of account, subsequent-measurement models, depreciation and amortization methods, residual-value treatment, useful-life reviews, document flow, inventory checks and working accounts. The fixed-asset depreciation method must be recorded in the policy (para. 45, NAS 5).

Reconcile the accounting and tax accounting policies separately. For every asset, the register should contain accounting and tax cost, the readiness or commissioning date, useful life, method, accumulated depreciation or amortization, modernization, revaluation and disposal evidence. This keeps differences between the two systems traceable through period close and reporting.

Frequently asked questions

Is there a mandatory accounting threshold of 50 BRV for fixed assets?

No. NAS 5 allows management to set fixed-asset recognition criteria in the accounting policy and does not prescribe a universal 50-BRV threshold for those assets. The more-than-50-BRV threshold is part of the corporate-income-tax definition of a fixed asset. For intangible assets, NAS 7 provides a 50-BRV threshold but allows management to set a lower threshold for the reporting period.

When does depreciation of new equipment begin?

Under NAS 5, depreciation begins on the date the equipment is recognized as a fixed asset and commissioned. Payment to the supplier or delivery alone is not enough if the item is not ready for its intended use. The date is supported by a commissioning act and primary documents, after which the item is transferred from capital expenditure to the relevant fixed-asset account.

Can a website or software be recognized as an intangible asset?

Yes, if the item is separable or based on a contractual or other legal right, is used for more than 12 months, is not held for resale, can produce benefits, is measured faithfully and is supported by documents establishing the exclusive right. Paying for access to another party’s service usually supports a service or right of use, but does not automatically create the entity’s own intangible asset.

How does modernization differ from repair?

Repair preserves the originally expected characteristics and is charged to period expense or production cost. Modernization, reconstruction or additional equipment increases cost only when it raises useful life, capacity, operating quality or another original performance measure. The conclusion is supported by a technical report, estimate, completion act and calculation of the revised cost.

What is checked when intangible assets are inventoried?

The commission checks evidence of the right of use, the term and scope of that right, whether the right holder matches the contract or certificate, and the recognition date, cost, useful life and amortization. It then reconciles the information to the intangible-asset record, accounting accounts and balance sheet. Inspecting a physical medium does not replace verification of the exclusive right itself.