What is Depreciation?
Depreciation spreads the cost of a fixed asset across the years it is used, rather than charging the whole cost in the year of purchase. It is both an accounting requirement and a tax computation input.
Depreciation spreads the cost of a fixed asset across the years it is used, rather than charging the whole cost in the year of purchase. It is both an accounting requirement and a tax computation input.
In Bangladesh
Delivery vans, generators, freezers, air conditioners and computer equipment are the assets that most often go unrecorded in smaller businesses, which then have no depreciation schedule to hand to their auditor.
An example
A delivery van bought for BDT 18 lakh and depreciated over eight years charges BDT 2.25 lakh a year on a straight line basis, rather than showing the whole BDT 18 lakh as an expense in year one.
In SORS ERP
The asset module in SORS ERP holds an asset register with depreciation methods, scheduled depreciation runs with reminders, maintenance, transfers, disposal and verification.
Also called
- In Bangla
- অবচয়
Questions
Answered plainly, including where the answer is no.
Which depreciation method should I use?
That is a question for your accountant, because the accounting treatment and the tax computation can differ. What the software should do is apply the method you choose consistently and produce the schedule.
See SORS ERP running on your own numbers
A 30-minute demo in Bangla or English, with your products, your VAT setup and your questions.