Accountants Ballarat: How can Depreciation in Accounting Benefit your Business?​

 
 
Spread the Word
Listed Under

Tag:
Accountant

Industry:
Accounting

Location:
Victoria - Australia

Aug. 12, 2020 - PRLog -- It's good for a business to buy assets to use within the business – fixed assets such as computers, vehicles and equipment. However, these assets lose value through regular use - this means less re-sale value. It may seem like a disadvantage but your business may actually benefit from this depreciation. At Sky Accountants Ballarat & Bookkeepers Ballarat, our goal is to empower you to become a better, more finance-focused and well-rounded entrepreneur. Contact us at info@skyacc.com.au or 1300 328 855 (tel:1300328855)

Depreciation in accounting is the loss of value of a fixed asset over time. An asset gradually depreciates from its original price as it gets old. You can determine the value depreciation of your business' assets to get an accurate figure of your business' true value as a whole. Depreciating assets include plant and machinery, vehicles, tools, equipment, technology, office furniture and business-related fittings, investment property and business property, among others.

A fixed asset is an asset in your business that allows you to earn income over a period longer than one year and loses value as it gets old. It can also be things like patents or copyrights that are important to your business. If the asset does not lose value like land, it is not depreciated. Consumable items, such as stationery and inventory don't depreciate as well, as they are used within the year of purchase.

Depreciation can be considered as the cost or expense of doing business, as all assets age and will need to be replaced. Depreciation in accounting lets you determine a yearly figure that your fixed assets lose, which you can add to your profit and loss sheet.

Business assets lose value over time and that means your business loses value as well. As your equipment age, they won't be worth as much as brand new ones. A business with ageing assets is not worth as much as a business with new assets. Your assets should be listed on your business' fixed asset register.

To calculate depreciation in accounting, you need to estimate the asset's lifespan based on the ATO's depreciation schedule for common small business assets.

To claim tax on depreciation, you would need to provide proof of purchase of your fixed assets, the amount being claimed for depreciation, the asset's adjusted tax value and a tax compliant invoice.

It is important to know how depreciation works so you can take advantage of the tax benefits available to you.

Sky Accountants Ballarat

As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here (https://www.skyaccountants.com.au/contact/) to speak to a business, accounting and bookkeeping firm.
End
Email:***@skyacc.com.au Email Verified
Phone:1300328855
Tags:Accountant
Industry:Accounting
Location:Victoria - Australia
Account Email Address Verified     Account Phone Number Verified     Disclaimer     Report Abuse



Like PRLog?
9K2K1K
Click to Share