Step 9 - Depreciation rates - Limited Company tutorial (ELTD)

After setting the specific descriptions,some depreciation rates now need to be set.

1. Select Edit | Fixed Asset Depreciation Policies

A panel will be displayed asking for the account number.

2. In the Account field enter 512 (which is the main account for freehold property) and click OK. (If you do not know the account number for an asset, click the magnifying glass when in the account number field.) Refer to your chart of accounts for further information on the fixed assets.

You need to enter the number of a Depreciation Policy rate on the screen which appears at this point. The freehold property is being depreciated at 2% on cost.

3. To list the rates available, click the magnifying glass.

If you require a rate other than the standard rates issued with Accounts Production then you can create a new rate in the Set-Up option from the main menu bar.

4. Highlight the applicable rate and click Select to enter this number in the field.

In the case of Tutorial Limited this rate is the only one that has been applied to the freehold property, so the fields for the dates do not need to be completed.

5. Click OK to register the rate. We do not need to enter any further rates for this asset so click Cancel. You will then see the rate appear on the screen.

6. Click Close to return to the fixed asset depreciation Account field so that you can go on to select rates for the other assets.

Machinery and equipment

1. In the Account field enter the number 523 and click OK.

2. In the Depreciation Policy field, click the magnifying glass to list the policies.

3. Scroll down the screen to highlight 15% on reducing balance and click Select.

4. The rate is entered in the field so click OK followed by Cancel.

5. When you see the rate on the screen click Close to go back to the screen where you select the asset.

Motor vehicles

1. In the Account field enter the number 525 and click OK.

2. In the Depreciation Policy field, click the magnifying glass to list the policies.

3. Scroll down the screen to highlight 25% on reducing balance and click Select.

4. The rate is entered in the field so click OK followed by Cancel.

5. When you see the rate on the screen, click Close to go back to the screen where you select the asset.

6. We have now finished entering the depreciation rates so click Cancel.

Note: Account 523 has an asterisk (*) next to the description to indicate that the account description has been changed.

7. Click Close to return to the main accounts production screen.