Depreciation allows for the wear and tear on a fixed asset and must be deducted from your income. You must claim depreciation on fixed assets used in your business that have a useful lifespan of more than 12 months. Not all fixed assets can be depreciated. Land is a common example of a fixed asset that cannot be depreciated. Learn about methods of depreciation and the records you must keep.
Learn about accounting for depreciation on patents, other allowable deductions and what to do when you sell a patent.
You will have to keep a fixed asset register to show assets you will be depreciating. This should show the depreciation claimed and adjusted tax value of each asset. The adjusted tax value is the asset's cost price, less all depreciation calculated since purchase. Learn why you need to keep records of fixed assets and view the use of a fixed asset register.
There are two types of calculations you can use to calculate depreciation (diminishing and straight line) on your business fixed term assets. You do not have to use the same depreciation method for all your assets, but you must use whatever method you choose for an asset for the full year. Learn about which method to use for your assets.
Learn about accounting for depreciation on fixed assets, deductions for assets you no longer use and the tax treatment of selling or disposing of assets.
Date published: 14 Oct 2004
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