Capital Purchases and Finance in AccountRight
HOW TO RECORD CAPITAL PURCHASES AND FINANCE IN ACCOUNTRIGHT There are many finance options available to purchase capital equipment. Commonly used in Australia are: chattel mortgages: ownersh...
Forum Discussion
Hi ronatbas, DuncanS, CarlyHutchings
The loan payment in total will be a spend money on the bank with allocation to the loan account.
Depending on the size of the small business and the depth that you want to go to in the P & L will decide whether you really need to record depreciation and interest charges on a monthly basis or you want to record them annually.
Depreciation for SBE is 15% flat in the year you purchase the capital item and then 30% each year after that, and you also need to take into account the SBE advantages presently in effect of being able to write off immediately items costing $20,000 or less (ex GST).
It is sometimes better to look at your P & L nett profit without accounting for interest and depreciation and thinking you may have a $20,000 tax bill coming up, and then factoring in these extra expenses later and then having less tax to pay.
If you do want/need to factor them in monthly, depreciation can be set as an auto record, as the monthly amount wont change.
Interest though will change each month, and reduce and will need to be obtained from the amortisation schedule if added to to the loan at the commencment.
