Saturday, September 7, 2019

Depreciation of Fixed Assets

Depreciation of Fixed Assets

Assalamualaikum WBT and Hello to all my visitors.

Today we will talk about depreciation and why we need to apply depreciation to our fixed assets.

Fixed assets are assets that we purchase onto the company to bring in benefits and generating revenues.

Most assets that have significant value and lifetime more than one accounting period shall be recorded as fixed assets.

Thus, we need to provide a provision to the assets as consideration for its wear and tear from normal business uses.

Here in Malaysia, assets such as computers will be depreciated at 33% per annum or have a lifetime of 3 years.

The depreciation rate depends on the company's policy. You also can easily just follow the standard depreciation rate that is used by other companies.

Depreciation Rates Guides
1. Office Equipment - (10 % to 20 %)
2. Machinery - (15 % to 20 %)
3. Motor Vehicles - (20 % to 25 %)
4. Fixtures & Fittings (15 % to 25 %)
5. Renovations - (20 % to 25 %)
6. Computers - (20 to 33 %)

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