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Questions on Depreciation

Below are answers to common depreciation questions. For more information visit to see our knowledge base on depreciation and fixed assets. You can read detailed posts on the features of Bassets eDepreciation, the latest industry news and post questions for our experts.

What is depreciation? What are the depreciation parameters?
What property is eligible for depreciation? Can I depreciate land?
What is not eligible for depreciation? GASB 34 compliant?
When do I start depreciation? How can Bassets help?
When does depreciation end?  

What is depreciation?
Depreciation is a deduction for capital expenditure.
Depreciation is a reasonable allowance for the wear and tear of assets used in a trade or business or for the production of income.
Depreciation decreases the company's balance sheet assets and is also recorded as an operating expense for each period.
Various methods of depreciation are used which alter the number of periods over which the cost is allocated and the amount expensed each period.

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What property is eligible for depreciation?
Property can be depreciated if it meets all these conditions:
Used for business or held for production of income
Has a useful life exceeding one year
Wears out or loses value over time

White Paper – A Guide to Basic Depreciation Calculation


What is not eligible for depreciation?
Property that has one year or less expected useful life.  This property can be deducted as current expenses in the year it is purchased.
Property disposed in the same year it is purchased.

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When do I start depreciation?
The year the property is placed in service which may be the same or later than the actual purchase date.

Click here to download a FREE Desktop Depreciation Calculator


When does depreciation end?
Either the tax year that the asset is fully depreciated (based on depreciation method & convention) or the year the property is retired from service through sale, exchange or destruction.
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What are the depreciation parameters?
In order to calculate depreciation, there are 4 required elements:
Cost of the asset
Date that the asset was placed in service
Depreciation method and first year convention
Recovery period that is based on the type of asset

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Can I depreciate land?
No, land is not eligible for depreciation, but a building is. 
To depreciate a building, first subtract the value of the associated land.

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GASB 34 compliant
The GASB Statement 34 establishes new financial reporting requirements for state and local governments throughout the United States. The major accounting changes related to capital assets are infrastructure reporting and depreciation accounting.

For more information on GASB Statement 34 – click here


How can Bassets help?
Less than 50 assets – access our online depreciation calculator here, Depre123. This is a web application that will calculate monthly depreciation for the entire life of an asset.
Less than 1,000 assets – Bassets eDepreciation Compact Edition is an excellent entry level fixed assets system.
More than 1,000 assets – Larger installations can use the WorkGroup (up to 10,000 assets), Standard (up to 100,000 assets) or the unlimited assets in the Enterprise edition to handle asset management and depreciation in a highly scalable application.
With a simple click of the mouse you can access the formatting tools that will allow you to customize Bassets to suit the specific needs of your industry and company. It is this simple adaptability, combined with ease of use, that has won us clients in every industry.

Our new Bassets Depre123 is a full featured, web-based depreciation application is a great option for organizations looking to track and depreciate their assets without having to maintain local software. Gain access toDepre123 anywhere that you have internet access.

Download a Product Overview of Depre123

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