Fixed Asset Depreciation Rate Calculator & Life Lookup Tool

Most businesses have assets that contribute to its ability to operate. Think of machinery, buildings, vehicles, furniture, computer hardware AND software. They all directly or indirectly contribute to a businesses’s revenue. The definition of depreciation is: An allowance for businesses to allocate the cost of a fixed asset over its useful life or life expectancy. But it generally does not make good sense to write-off all assets in their first year of use, notwithstanding recent generous legislation. This opens up a whole other discussion on Tax versus Accounting depreciation. Visit the link for the deep dive on this topic. But back to the question, why is it important to depreciate fixed assets?

• Accuracy of financial information and reporting. Depreciation accurately states the incurred expense compared to the revenue contribution it makes. Under or over reporting depreciation can skew the financial position of a business so it is an important piece of compliance.
• To delineate a tax value of an asset versus the book value. See again the above link if you haven’t already.
• Calculating the current book value of any/all assets net of wear and tear. This is achieved by subtracting the accumulated depreciation from the original purchase cost of the asset.
• Taking advantage of business tax incentives. Governments often change and amend its rules for tax depreciation. The calculator below will definitely help you to make sure you are depreciating for tax in the most effective way to lower the company’s annual taxable income thus increasing company tax savings. Subscribing to AssetAccountant™ software will keep even the most complex fixed asset register accurate and accessible.