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Locutus of Borg
By Locutus
23rd Jun 2018 13:29

I agree with your accountant.

That is the common convention (and simplest method) unless you are doing monthly management accounts, in which case you would typically calculate depreciation on a monthly basis.

Since depreciation is just an estimate, there are many acceptable ways of calculating it. Whether any is more or less accurate than another is debatable. In the grand scheme of things, it rarely matters that much.

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Replying to Locutus:
paddle steamer
By DJKL
23rd Jun 2018 15:05

Except re availability of reserves to pay dividends.

Whilst I would normally use full year charge re smaller value items things like a £100,000 Porsche I tend to compute on a monthly basis.

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By Mike Bath
25th Jun 2018 09:35

Strictly, one should only depreciate an asset in accordance with the time that you own it. Some preparers do charge a full year's depreciation in the year of purchase and none in the year of disposal, but that's an accounting policy choice. There's certainly no rule to say that that's what you have to do.

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