Re: CCA / Depreciation of Capital Assets ?

[Leah Kubik <..hidden..>]

On Tuesday 24 April 2007 20:40, Tony Fraser wrote:

> I know I'm late answering this but I'm just catching up on the list.

Your response below was extremely useful.  I'll probably add something to the 
wiki regarding this.  I'll be giving this a shot with my own accounting, but 
it makes a lot of sense.  I had nearly come to this sort of conclusion on my 
own :)

Leah

> 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"
>
>                                          Dr.             Cr.
>
> When you buy a computer:
> Computers                            1000.00
> 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
>
> Disposal:
> 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.

-- 
Leah Kubik : d416-585-9971x692 : d416-703-5977 : m416-559-6511
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