Depreciation & Amortization
Expensing a capital purchase in the month it happens is the single most common error we find in trades and equipment-heavy books. It overstates the cost of one month, understates every month after it, and leaves a pile of adjustments for somebody else to find in December.
What's included
- A fixed asset register built and then kept current
- Monthly depreciation and amortization entries rather than one year-end catch-up
- Capitalize-or-expense decided when the purchase happens, against an agreed threshold
- Disposals and trade-ins recorded properly, including the gain or loss
- Financed and leased assets distinguished from owned ones
- Schedules your accountant can reconcile to directly
Who it's for
- Equipment-heavy businesses, trades, transport, manufacturing
- Companies financing or leasing vehicles and equipment
- Owners who bought something significant and aren't sure how it was recorded
- Anyone whose year-end always arrives with a stack of asset adjustments
How it runs
The actual sequence, start to finish.
- 01
Build the register
Every existing capital asset identified with its cost, in-service date, and whatever has already been taken against it.
- 02
Set the policy
A capitalization threshold and useful lives agreed up front, so treatment is consistent rather than decided case by case by whoever coded the invoice.
- 03
Post monthly
Entries go in with the close, which means the balance sheet is right in March and not only in December.
- 04
Hand over clean
Schedules go to your accountant in a form they can tie out directly, which keeps year-end straightforward.
What it costs
Quoted after a books review, based on how many assets are in play and the state of the existing records.
Questions about depreciation & amortization
Isn't this something my accountant does at year-end?
Year-end is one place it gets handled. Doing it monthly means your statements carry the right asset values all year in the meantime, which matters a great deal if you're making decisions off them or showing them to a lender.
Is this the same thing as capital cost allowance?
No, and the distinction matters. Book depreciation reflects how an asset is actually consumed; capital cost allowance is a tax calculation with its own classes and rates. We maintain the book schedules and keep them in a form that supports the tax work, whether we're doing that filing or your accountant is.
What about leased equipment?
Whether a lease belongs on the balance sheet depends on its terms, so we read the agreement rather than assume. It is one of the more commonly mis-recorded items in trades businesses.
More questions answered on the FAQ page.
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