Hardware Depreciation

[SimonMac]

OK, one of the few times doing my own books has got me stumped!

Hardware deprecation is simple 33.3% of the original purchase price each year, but what happens after year 3 as 33.3% + 33.3% + 33.3% is only 99.9% do I just ignore the last 0.1% and assume it has no value so not to be counted in year 4 accounts?

[TheCyclingProgrammer]

You would depreciate the remaining 33.4% in the last year if depreciating over 3 years.

[Alias]

and it is a straight flat line depreciation or not?

[ASB]

How you depreciate it in your books and the amount that can be charged to tax can of course be different.

[Lance]

OK, one of the few times doing my own books has got me stumped!

Hardware deprecation is simple 33.3% of the original purchase price each year, but what happens after year 3 as 33.3% + 33.3% + 33.3% is only 99.9% do I just ignore the last 0.1% and assume it has no value so not to be counted in year 4 accounts?

It's not really 33.3% depreciation you're meant to be doing. It's 1/3. 33.33333333333333333333333333% is as close as you'll get in decimal but will never actually be 1/3.

[VectraMan]

It's not really 33.3% depreciation you're meant to be doing. It's 1/3. 33.33333333333333333333333333% is as close as you'll get in decimal but will never actually be 1/3.

And what happens with the remaining 0.0000000000000000000001%?

I always do 25% then you don't have these problems.

[Lance]

And what happens with the remaining 0.0000000000000000000001%?

I always do 25% then you don't have these problems.

there is a term. De Minimus. It's latin. It's a legal term. It means you can ignore it.

Or just depreciate by a 1/3rd...... that way you do 33.4, 33.3 and 33.3
And that's more accurate than Sage Line 50 does VAT rounding.

[css_jay99]

And that's more accurate than Sage Line 50 does VAT rounding.

I was now aware sage calculates depreciation.

I always journal it.

The last year of depreciation to contain the balance if there is a decimal issue .... which can be a pain the accounts section of the HMRC tax return when entering fixed asset opening and closing balances in the notes section when rounding back up or down