Depreciation and capital allowance - why is capital allowance shown on the depreciation schedule but not in the posted depreciation figure?

Depreciation schedule has been set up using the Worksheet method

It includes depreciable assets as well as capital works assets

The capital allowance is shown on the depreciation schedule but is not included in the ‘posted depreciation’ figure

Is this okay - capital allowance is not included in the ‘posted depreciation’?

Hey @phillip

The Capital Works Expenditure is a tax adjustment.

From the Period Compliance screen, you should see a Tax Adjustments Button.

Suppose you have populated the Depreciation Schedule correctly. In that case, you should see the Capital Works Expenditure flow through as a tax adjustment (if you had a pension policy in place it would also split between D1 and D2 .)

This will populate on your tax return section C when you create entries to 30/06.

Thanks Anthony

I see the button

However, I understood building allowance can be posted as a tax adjustment or posted through the depreciation schedule

That is what the help article says

‘how to process capital allowance or works deduction?’

I have done it through the depreciation schedule / method 2 – I have multiple depreciable assets and a capital works deduction

Is that article no longer in use?

Hey @phillip

It will always be a tax adjustment you can just trigger the tax adjustment from the Depreciation Schedule.

but why isn’t it also a depreciation schedule item when you have multiple depreciable assets and a capital works deduction? - as is said in the article

Hey @phillip Article has been updated.

thanks Anthony

I will have a look

At the moment, the capital allowance items are on the depreciation schedule

they are on there

The capital allowance figure appears with the depreciation figure on the schedule

Should the capital allowance items stay on the schedule or should they be removed?

Hey @phillip

If you have used the schedule to create the capital works deduction then it will be on the report.

‘used the schedule to create the tax adjustment’

i used the schedule to record the capital works

i haven’t used the schedule to create a tax adjustment

i cannot see how this is supposed to work

i cannot see it

it seems to me from that amended article we can only post depreciation after we have the actuarial certificate

we get the actuarial certificate then post depreciation

is that right?

Hi @phillip

You are able to post depreciation prior to getting the actuarial certificate. It is recommended to have the certificate first and then post the depreciation, however as long as the Create Entries process is reversed and then completed again after receiving the Actuary, then it is fine to post the depreciation prior to receiving the Certificate as this will update the split between D1 and D2.

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Thanks Luke

I will try this

I say this needs to be made clear in the notes / help articles on the depreciation schedule establishment and maintenance

Needs to be made very clear because at the moment it is not clear

This goes in the face of normal processing and understanding, which is to process all transactions first then obtain an actuarial certificate

This would include depreciation to be posted before obtaining a certificate, then create entries

I suggest you add clarity

“We recommend you to have the certificate first and then post the depreciation

If you do not so this, that is, you post depreciation before creating entries, ensure the Create Entries process is reversed and then completed again after receiving the Actuary certificate”

You must make this clear

I also suggest you look at the depreciation schedule when it includes items subject to building allowance

These items are included in ‘calculated depreciation’ and ‘posted depreciation’ – yet the figure in the operating statement excludes building allowance (which is fine)

I suggest the depreciation schedule moves capital works items to the end, and has a separate total for ‘calculated depreciation’ and ‘posted depreciation’ that adds through, and also agrees to the depreciation expense in the gl

Further, the cap works amount will agree to the tax rec and annual return

I will be posting feedback to this effect

Thanks and regards

I like your suggestion Phillip, the Depreciation Schedule hasn’t been a well developed feature of SF360, its only recently received a few upgrades.

Jy

Can you please give this absolute priority

It needs to happen

Thanks
Regards

I think BGL has focused their resources on setting up their new Simple Invest 360 - not sure what their priorities are at the moment.

Yes depreciation is an Achilles heel of SF360. It was also Simple Fund Desktop’s Achilles heel too that received no development to make it ‘better’ in all the years I was using it for (since at least 2006).

Don’t hold your breath, depreciation has always felt like an after thought with BGL.

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