SBC - depreciation

[Jennajay]

Its me again - i seem to be having more questions than answers - i do apologize.
I had a look at our old accountants depreciation calculations
Am i under the right assumption that SBC's have their own specific depreciation rates being 50% in the first year, 30% in the second year and 20% in the third year for all non manufacturing assets?
Our old accountant used different rates - is there a way where i can adjust in the current year so to calculate depreciation according to the special SBC rates?

for example - if there is an item bought for R10 000 last year and my old accountant used a 33% depreciation rate
during this year i will have cost price of R10000 accum depreciation figure of R3333,33
it should of been at the end of this year a cost price of R10000 and accumulated depreciation of R8000(according to SBC rates) can i therefore put through a depreciation charge of 4666,67 (8000-3333,33) for this year?

help please

[geraldenek]

Hello Jennajay

where it is not any machinery, plant, implement, utensil, article, aircraft or ship you can either choose to make use of the normal depreciation rates or the 50/30/20 method.

if you do want it as the 50/30/20 don't go back to the previous year to change it, just do a journal for what it should be as in your example

current year depreciation should be R4666.67 for this year then and accum depr R8000

[Jennajay]

Hello Jennajay

where it is not any machinery, plant, implement, utensil, article, aircraft or ship you can either choose to make use of the normal depreciation rates or the 50/30/20 method.

if you do want it as the 50/30/20 don't go back to the previous year to change it, just do a journal for what it should be as in your example

current year depreciation should be R4666.67 for this year then and accum depr R8000

Thanks Geraldenek just wanted to double check - this would mean that i would have a very large depreciation expense? as there are some item that are say in their 4th year of depreciation, i could write off the rest of the remaining depreciation for the asset all in this year....

[geraldenek]

hi yes you can, but why change the policy now and not keep it on the normal depreciation used in previous years?

[Jennajay]

We are a recording studio with ever changing technologies, the 50, 30, 20 ratio best describes the way our assets get 'used up'.