Editing Book Keeping Task/Depreciation
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== Procedures == | == Procedures == | ||
=== Fixed Assets === | === Fixed Assets === | ||
- | Any purchase of $500 or over for an asset that will not be used up in | + | Any purchase of $500 or over for an asset that will not be used up in the year is placed in a Fixed Asset account. |
An account is created for the category, if one does not already exist. | An account is created for the category, if one does not already exist. | ||
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In some cases, this practice has not been applied to purchases in previous years. | In some cases, this practice has not been applied to purchases in previous years. | ||
PCSAR will continue to use the categories as is, without attempting to adjust for previous years. | PCSAR will continue to use the categories as is, without attempting to adjust for previous years. | ||
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=== Amortization Expense === | === Amortization Expense === | ||
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Assets are depreciated at the specified percentage each year. | Assets are depreciated at the specified percentage each year. | ||
50% of the stated rate is used for assets that are purchased within the financial year. | 50% of the stated rate is used for assets that are purchased within the financial year. | ||
- | '''Depreciation is done on the declining balance.''' | + | '''Depreciation is done on the declining balance.''' ie the balance at end of the year and use that figure to calculate depreciation. |
Example: | Example: | ||
- | * Satellite Phones $5000.00 depreciated value at start of the year | + | * Satellite Phones $5000.00 depreciated value at start of the year |
* purchased one more during the year for $1,000.00 | * purchased one more during the year for $1,000.00 | ||
* Add the $5,000 and 1/2 of the $1,000.00 = $5,500.00 at 20% = $1,100.00 in depreciation which would be booked at the end of the year. | * Add the $5,000 and 1/2 of the $1,000.00 = $5,500.00 at 20% = $1,100.00 in depreciation which would be booked at the end of the year. |