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Re: CCA / Depreciation of Capital Assets ?
- Subject: Re: CCA / Depreciation of Capital Assets ?
- From: "Chris Travers" <..hidden..>
- Date: Tue, 24 Apr 2007 17:44:15 -0700
That reply was very helpful. Maybe we could include the example in
future versions of the manual?
On 4/24/07, Tony Fraser <..hidden..> wrote:
On Thu, 2007-04-05 at 11:02 -0400, Leah Kubik wrote:
> I tried to send a question about this before, but I am not sure if it
> through correctly. Anyhow, I'm doing my taxes and I'm trying to
> figure out
> what is the best way to track in the Ledger-SMB Capital Assets on
> which I
> claim CCA allowances yearly for.
> That is, you can write off, say, 40% of the costs of a computer as a
> cost on your taxes, each year. So the value of that asset, you have
> assume, is reduced by 40%. I am trying to sort out what is the best
> way to
> do this in the accounting system so that I know the next year what
> part of
> the assets have been depriciated, what is still left, etc. Has anyone
> up with a nice way to handle this?
> CCA is the specific term used for Canadian Capital Cost Allowance
I know I'm late answering this but I'm just catching up on the list.
Normally in Canada and I think in most parts of the world this is
handled with 3 accounts
An asset account such as "Computers"
An asset account such as "Accumulated Amortization, Computers" that is
normally a negative balance therefor it is a contra account
An expense account such as "Computer Depreciation"
When you buy a computer:
Bank Account 1000.00
End of year 1:
Computer Depreciation 400.00 40% of $1000
Accumulated Amortization, Computers 400.00
End of year 2:
Computer Depreciation 240.00 40% of $600
Accumulated Amortization, Computers 240.00
End of year 3:
Computer Depreciation 144.00 40% of $360
Accumulated Amortization, Computers 144.00
Bank Account 75.00 sale of computer
Accumulated Amortization, Computers 784.00 reversing entry
Computer Depreciation 141.00 residual value
Computers 1000.00 reversing entry
As Chris said there's no way at the moment to automate this within
LedgerSMB so you'll have to use GL entries.
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