Why Do You Need Depreciation Schedule

Depreciation or claiming the lowering in value of add-ons within your property or the property itself can be a great way to minimize your tax expenses and to maximize your return on investment. A Brisbane depreciation schedule is a report that is done by a quantity surveyor, which gives you the breakdown of your property and all the items within your property and how much you can depreciate and how fast they depreciate.  There is a lot of detail that goes into these depreciation schedules and it’s not something that you should and really can do yourself so I do suggest you going out there and getting a report done so that you can maximize your return on investment and maximize your tax savings.

A depreciation schedule is based on a depreciation type, a starting value, a salvage or end value, and periodic reductions in value. The periods can be time-based or meter-based based on utilization.

Two standard types of depreciation schedule:

• SL (straight line) means that the value depreciates in a straight line. That is, the value depreciates at the same rate over the lifetime of the asset, whether the lifetime is time-based or meter-reading-based.
• DDB (double declining balance) means that the value depreciates at a faster rate early in the life of the asset than it does later in its life.

Depreciation occurs when an economic asset is used up. This includes different types of property and equipment. As these assets are used, they begin to degrade and lose value. Different assets lose value at different rates, and a Brisbane depreciation schedule helps outline these differences. The schedule will list the different classes of assets, the rates of depreciation they take on each period, and the cumulative depreciation they have incurred up to that point in time. The depreciation schedule may also include historic and forecast capital expenditure. The purchase price of the asset plus any other spending that should be added to the asset’s cost. Although most additions to purchase price take place when the company acquires the asset, the fixed asset cost can be added to after the fact if material renovations are performed.

A company may use different depreciation methods for different types of assets. All businesses keep a depreciation schedule for their assets showing all the relevant details about each asset. Depending on the size of the company, the depreciation schedule may also have the fixed asset’s identifying number, the location where the fixed asset is kept, property tax information, and many more facts about the asset. Depreciation schedules are already great value as they typically provide an excellent return on investment. It is possibly that the highest return on investment of any investment property related expense. Brisbane depreciation schedule are even better value when the cost is also 100% tax deductible.

Depreciation on your investment property is just compensation for wear and tear. Buildings wear out. So do stoves, carpet and others especially with tenants. So you get to depreciate them, or write them down, a bit every year. Anything you use in your business often you get to depreciate, like your automobile for example, because your automobile is actually depreciating in value as well.