Dave, Whether your purchases are second hand or not is irrelevant to their depreciation as assets in your business (that is unless your tax authority has a rule stating otherwise). The depreciation rules and rates are set by your tax authority and they usually have a schedule which sets out what purchases can be depreciated and at what rate and which can be expensed to your business immediately at purchase (there is usually a threshold value). When you depreciate an asset each depreciation event is a write off of part the value of the asset to the appropriate expense account (credit to asset account- debit to expense account). It is completely written off when its book value as an asset reaches zero. It may still function and be useful to your business beyond that time however. Most tax authorities will also allow a pool of low value assets to which you can add new low value asset purchases and the pool is depreciated as a whole - depnds very much on jurisdictional rules.
If you want to record your history of capital purchases you would need to construct this from the records for each year in your books for that year- a separate management exercise and proper ERP software would do this for you but it records and maintains a lot beyond the accounting information to do so. It is common to use an account structure for depreciating assets in which a placeholder account for the particular asset has a sub account which is debited for the original purchase price and a second sub account or contra account in which the depreciation events for that asset are recorded by crediting the asset's depreciation account and debiting the depreciation expense account for the amount of the depreciation. I.e. Asset:Particular Asset Asset:Particular Asset:Purchase Value Asset:Particular Asset:Depreciation - contr account to record depreciation To record an existing item which is partially depreciated already when setting up the books you would credit this account for the accumulated depreciation to the date of the start of your new books and debit an Equity->Opening Balances account (or sub account) for accumulated depreciation and you would debit the Asset:Purchase Price value by the amount of the original purchase price and credit the Equity:Opening Balances account for that amount. This will allow you to carry forward existing depreciating assets into a new set of books Dealing with pooled assets will strongly depend on your jurisdictional rules as does depreciation in general. David Cousens. On Tue, 2023-01-17 at 22:29 +0000, Dr. David Kirkby wrote: > On Tue, 17 Jan 2023 at 18:58, Adrien Monteleone < > adrien.montele...@lusfiber.net> wrote: > > > > > Maybe I misunderstood, I thought you wanted to track the items' values & > > depreciation separately. By all means, otherwise lump them in one > > account. (you can of course make separate transactions for each item, > > which would allow you to run Transaction Reports filtered on each item > > if needed) > > > > I might do that. > > > > > > What would you do for transactions that have already been written off? I > > > was tempted to add those, as the company has been going for 8 years, so > > > whether I add 8 years of assets or 5 does not make much difference - am > > > extra 55 items. > > > > I don't see why there would be any need to. If they are already zero, > > they don't need to enter the book at all as far as I can tell. > > > Although written off, it might possibly be of some use to be able to look > back over the years and see what was bought. > > If something had been purchased 4 years ago, would you bother recording the > value each year, or just that when the accounts were submitted? I guess > that’s probably a personal preference. > > I think nearly everything of mine is written off after 5 years. I think > some companies might write electronic test equipment off over a longer > period, but virtually all of mine is purchased used, and often when the > manufacturer considers it obsolete. > > > > > Then continue to depreciate as instructed by your accountant. None of > > this involves Vendors or Bills. > > > Okay. > > > > > > > > > Regards, > > Adrien > > > Thank you for the help. I didn’t get anything done with my accounts today, > due to other more pressing issues like dispatching items to customers, and > attending to my dog who has a bad paw. > > Dave > > > -- > Dr. David Kirkby, > Kirkby Microwave Ltd, > drkir...@kirkbymicrowave.co.uk > https://www.kirkbymicrowave.co.uk/ > Telephone 01621-680100./ +44 1621 680100 > > Registered in England & Wales, company number 08914892. > Registered office: > Stokes Hall Lodge, Burnham Rd, Althorne, Chelmsford, Essex, CM3 6DT, United > Kingdom > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
