What topic should I cover next? Let me know your thoughts ⏱TIMESTAMPS 00:00 - Intro 00:35 - What is Depreciation? 11:24 - Straight Line Depreciation Method 17:58 - Double-Declining Balance Method 23:19 - Sum of the Year's Digits Method 31:03 - Units of Production Method
Capital improvements to a fixed asset can extend its useful life or increase its value. As a result, the depreciation expense may need to be recalculated based on the updated book value and revised useful life.
What are the methods for remembering to do all this? A real business likely has a tonne of asserts all bought at different times, and depreciated at different rates. How do you do this in a way where someone looking at the books for the first time knows what was done, and what is left to do?
Hey so I’m taking my first accounting class for school and I have a upcoming exam next week how do I study for it. Like we have learned is the role of accounting business, basic accounting concepts (cash basis) and basic accounting concepts (accrual basis). I’m just so confused
@@Mannie- Well I'd start with those and try to do as many as possible. Refer to the explanations for any that you get wrong and read up on those pages of your notes. You've still got time... best of luck!
@AccountingStuff on equipment I buy for my business. If it's 800 I get to write it off over 5 years and don't get to fully wight it off over the 5 year period. It costs me 5 years of stress. I'd rather pay the 33 percent tax for pulling the money out of the company funds and be done with it. Plus of it is bought this way I own it and can sell it without recapture if I no longer need it
so how does this apply to income tax? depreciation strategy is to bring down your taxable income? you didnt really explain the point of depreciation and how it applies to tax return. can i depreciate everything i buy? does it have to be a business expense? what if im not an entrepreneur? what do you do with your closing book value? does that go on your tax return or something?
I didn't cover the tax treatment of depreciation because it varies depending on when you live. Generally, Fixed Assets are depreciated at a rate determined by your local tax office. This determines the expense which reduces your Taxable Income each year
I dont know about your country but here in my county Pakistan the depreciation expense on different categories of assets is fixed on straight line method. And you have to reverse all the depreciation expense you booked and tax authorities calculate your depreciation expense for the year
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What topic should I cover next? Let me know your thoughts
⏱TIMESTAMPS
00:00 - Intro
00:35 - What is Depreciation?
11:24 - Straight Line Depreciation Method
17:58 - Double-Declining Balance Method
23:19 - Sum of the Year's Digits Method
31:03 - Units of Production Method
Fixing common new business bookkeeping mistakes!
Year end closing entries maybe? Thanks!❤
@@AnaMarieD-y7b I've covered Closing Entries in this video: th-cam.com/video/e1z2lpdQyGQ/w-d-xo.html
@@AccountingStuff Thank you so much James! Really appreciate it! You’re the best!❤️
@@jfdd43 That's a good idea!
Very good explanation and information. Thank you!!
Thanks!
I love you James 🎉😊 You saving me 🎉😊
All the best :)
Very useful info, thanks 😊
Glad to hear it!
Nice one sir, I really need this topic, thank you very much
You're very welcome! Hope it helps :)
We were just tutored on Deprecation at my ICAN Tutorials 😅.. this is helpful
Awwwwn 😊
Oo you from Nepal. I too am aspirant of Ican.
Glad it was helpful!
Thank you for this video. Very clear and informative.❤️
You're very welcome :)
Really helpful and easy to understand video, thanks!
Thanks Jack! Great to hear you found it useful :)
Great! Many thanks!
Question:
Does the monthly depreciation expense amount change after maintenance and improvements to the Asset?
Capital improvements to a fixed asset can extend its useful life or increase its value. As a result, the depreciation expense may need to be recalculated based on the updated book value and revised useful life.
could you please do a video on irrecoverable doubtful debt allowances?
Thanks for your request!
What are the methods for remembering to do all this?
A real business likely has a tonne of asserts all bought at different times, and depreciated at different rates. How do you do this in a way where someone looking at the books for the first time knows what was done, and what is left to do?
Nowadays the heavy lifting would be done by the Accounting Software
hey james great videos can you do videos like this about audit and assurance🙂
Thanks for your request!
can you give an example of the DDB that has residual value
Thanks for your request!
hi james its me again i find your videos are super funny i love them
Thanks, that's great to hear!
Hey so I’m taking my first accounting class for school and I have a upcoming exam next week how do I study for it. Like we have learned is the role of accounting business, basic accounting concepts (cash basis) and basic accounting concepts (accrual basis). I’m just so confused
Have they given you any practice questions?
Yes
@@Mannie- Well I'd start with those and try to do as many as possible. Refer to the explanations for any that you get wrong and read up on those pages of your notes. You've still got time... best of luck!
Sir, where did u get the 8.33% in the straight line method
Maybe it's only because I'm just learning this now, but I'd rather just pay the tax on the money used to buy the machine and be done with it.
Sales Tax? Businesses pay Income Tax on their profits, not their expenses.
@AccountingStuff on equipment I buy for my business. If it's 800 I get to write it off over 5 years and don't get to fully wight it off over the 5 year period. It costs me 5 years of stress. I'd rather pay the 33 percent tax for pulling the money out of the company funds and be done with it. Plus of it is bought this way I own it and can sell it without recapture if I no longer need it
James, How would the Journal Entries look like on the Combine Harvester?
Was the Combine Harvester paid in Cash, On Account, or was a loan taken out against it? Please advise.
Do you have anything on depletion?
Not yet, but I'll keep it mind for a future video :)
@AccountingStuff yes please thank you 🙏
@@susanrodriguez9438 👍
change in useful life and capital expenditure
Thanks for your request!
Is this relevant in SA(South Africa)
Yes, I'd say most of it would be
so how does this apply to income tax? depreciation strategy is to bring down your taxable income? you didnt really explain the point of depreciation and how it applies to tax return. can i depreciate everything i buy? does it have to be a business expense? what if im not an entrepreneur? what do you do with your closing book value? does that go on your tax return or something?
I didn't cover the tax treatment of depreciation because it varies depending on when you live. Generally, Fixed Assets are depreciated at a rate determined by your local tax office. This determines the expense which reduces your Taxable Income each year
@@AccountingStuff thanks for replying!
@@robyee3325 You're very welcome :)
I dont know about your country but here in my county Pakistan the depreciation expense on different categories of assets is fixed on straight line method. And you have to reverse all the depreciation expense you booked and tax authorities calculate your depreciation expense for the year
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Thank you :)
james :3