Wear & Tear Claim

[Nakwila]

Good Morning Team,

What are the condition/(s) for a business to claim wear & tear? This is the scenario, the member contributed (brought in assets - PPE which he accumulated over the years and used it before registering the business). Brought these used assets into the business as Capital Contribution. Can the business claim wear & tear?

Thanking you in advance!

[Andromeda]

The company law in Namibia is a bit different, but I imagine it is very similar regarding paid up capital and fixed assets.

I assume the capital contribution is the credit and the assets are the debit? If that is the case I also assume that the assets are depreciated, which is then added back to profit for the tax calculation and then wear and tear is deducted.

If you are happy that they exist then I don't see why not. The assets are run down by the production process and wear and tear takes account of the reduction in value.

[Nakwila]

The company law in Namibia is a bit different, but I imagine it is very similar regarding paid up capital and fixed assets.

I assume the capital contribution is the credit and the assets are the debit? If that is the case I also assume that the assets are depreciated, which is then added back to profit for the tax calculation and then wear and tear is deducted.

If you are happy that they exist then I don't see why not. The assets are run down by the production process and wear and tear takes account of the reduction in value.

Thank you very much Andromeda, thought as much but was not confident!