Fixed asset Depreciation calculation

siva

Hi Guys,

Can somebody help me, I am trying to do t he depreciation for june, as my manager has left work due to some problems i am asked if i will be able to do it, i havent got the register workings but have the values so i amm not sure how she has done the monthly depreciation values.

Its 5 years straight line so i would assume that if cost is £5000, depreciation charge will be £1000 every year divided /12 for each month. but she has diffrent figures every month how is that possible.

just want to know why the monthly depreciation charge diffs every month while it is straight line.

Thanks.

BeccaLouJ9

Have there been disposals or additions in the year(s)?

If not then I don't see why it would be diff if it is straight line...

B x

P.s. I have pm'd you

siva

HI Becca,

Its individual assets and depreciation differs every month for each and every individual asset.

I can understand if there was any changes in the total depreciation, but each line differs every month by few pounds less sometimes more sometimes.

I am breaking my head.

PGM

Is it worked out on days instead of months? That would explain slight variations.

I'd say either wait or use your best guess if its urgent!

siva

I tried to do it by day, then we should have same figures for mar and may as they are 31 days, but no they are different. oh well i am jsut gonna do it as cost/15 months and then/12 months for now, let see.

Thanks PGM.

MarkT

Would you not have one principle on depreciation for things such as cars and a different principle for smaller items such as computers?

I could understand large machinery and vehicles perhaps running on a 5 year, but not computers and small office equipment?

siva

yes we do, Computer and small equipments are 3 years. plant and machinery 5 years and property 15 years.

MarkT

Maybe I'm being a bit on the green side here, but could that not account for the difference?

Bluewednesday

I think Siva is saying that each asset has different amounts in each month, rather than each class

wbauk2002

Could it be some are straight line, and others are reducing balance?

sdv

siva wrote: »

HI Becca,

Its individual assets and depreciation differs every month for each and every individual asset.

I can understand if there was any changes in the total depreciation, but each line differs every month by few pounds less sometimes more sometimes.

I am breaking my head.

Why don't you look at last year's actual accounts and concentrate on one class of assets. Work backwards and confirm that your company's depreciation policy has been applied. If not then the policy is different in which case you will have to go back a further one year back and confirm the policy applied is consistent on both year's figures. you will have to do some working.

alternatively ring your company's accountant (auditors) and ask them what is the depreciation policy applied? This information should be in the final approved accounts of previous years.

Forget what your predecessor did and start to apply the company's correct depreciation policy.