What are Depreciation Allowances?Depreciation allowances are given for most assets within your business which have a lifespan of more than 12 months and you are required, by the IRD, to claim your depreciation allowance on all applicable assets.
Which assets do I need to claim depreciation allowances on? Generally, you will need to claim a depreciation allowance on all company assets with life spans longer than 12 months. However, there are exceptions to this rule. For example, you will not claim a depreciation allowance on land or on low-value assets which cost less than $500. For full details on depreciation allowances and what you need to claim, please check the IRD Depreciation Guide.
What do I need to do? You are required to keep a fixed asset register which shows how your assets are depreciating. The tax value of each asset will be lowered in line with the ongoing calculated depreciation since purchase. Your fixed asset register should show the depreciation allowance you’ve claimed for each asset, along with its adjusted tax value.
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