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Depreciation reports: Replacing a depreciating item due to damage

Discussion in 'Accounting & Tax' started by proper_noobie, 28th Mar, 2016.

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  1. proper_noobie

    proper_noobie Well-Known Member

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    If:
    • Have a recent depreciation report
    • Tenant damages part of the house (eg carpet) that is only a few years old
    • Carpet is replaced mostly at landlord cost
    Do you need a new depreciation report since the new carpet has a new lifespan? What's the correct approach?
     
  2. wylie

    wylie Moderator Staff Member

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    Wouldn't you now use the receipt for the new carpet? No need to update the report if you have documentation for the new expenditure?
     
  3. proper_noobie

    proper_noobie Well-Known Member

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    I thought items over a certain value have to be depreciated over a period of some years instead of written off in a single year?
     
  4. wylie

    wylie Moderator Staff Member

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    However your accountant treats the new carpet (repair or replace - I leave that to the accountant) he has a receipt so there would be no need to update your depreciation report. That is my understanding anyway.

    To answer your original question... I would say you don't need to pay to update a report when you have a receipt for the new carpet. You know its value.
     
  5. Coota9

    Coota9 Well-Known Member Premium Member

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    @proper_noobie

    Most companies will normally update report once for free..
     
  6. Depreciator

    Depreciator Moderator Staff Member

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    Your accountant may claim the written-down value of the carpet that was disposed of and then start depreciating the new carpet.
    Adding items to a Dep Schedule is easy - we have many clients who get in touch around tax time every year for updates.
    Scott