Concepts guide - Depreciation

David Harrison DavidHarrisonCGA at gmail.com
Thu Oct 7 11:22:15 EDT 2004


> Can you try to work the above paragraph into the docs somewhere?  If you
> want, just copy and paste from the web-based docs and email me the
> changes, I can put your contributions into the Concepts Guide.  Just
> tell me what the URL is you are working on if you send me new text.
> 
> Start here:
> http://www.gnucash.org/docs/v1.8/C/gnucash-guide/

I will work on it.  I already grabbed the pages in question and saved
them locally.  When I'm done I'll email them to you.  I have done some
web design before, so I'm comfortable working in html.  I'll try not
to break anything. ;)

> 
> > For example, if
> > an asset will produce income for 5 years on an even basis every year,
> > then a straight line depreciation would be appropriate.  Or, if an
> > asset with produce x number of dollars per man hour used, then it
> > should be depreciated based on the number of man hours it is used over
> > the estimated number of man hours it will be used over it's entire
> > life.
> 
> Okay, but aren't you simply describing a new depreciation scheme?
> http://www.gnucash.org/docs/v1.8/C/gnucash-guide/dep_value1.html#dep_valueschemes2
> 
> We currently describe the linear, geometric, and sum of digits schemes.
>   What you mention could simply become a fourth depreciation scheme,
> maybe entitled "man hours".  No?

Sorry, I was just giving another example.  In reality there are many
schemes, probably too many to talk about in the concepts guide.  I
think the schemes talked about already are the best ones to leave in
there.  The two most common  ones used here in Canada are straight
line (because it's easy) and geometric (because it matches tax law).
> 
> > Although we may in the future, for capital assets are not written up
> > if the value increases.  Nor would the carrying value (cost less
> > depreciation) be written down if the market value is less than the
> > carrying value. Note that I'm talking about capital assets, not
> > investments, inventory, or like instruments that are recorded at the
> > lower of cost or market value.  Nor am I talking about intangible
> > assets, like trademarks, patents, goodwill - that's a whole other
> > topic.
> >
> > Anyway, I started working on rewriting the chapter, but I stopped
> > because I wanted to clarity who the audience was before I wasted all
> > my time for nothing! ;)
> 
> I would supposed that the depreciation chapter should be "mostly" aimed
> at business use, but should still be usable by a personal user.
> 
> Thanks for any clarification you can bring to the depreciation chapter.
>   I will be happy to work with you to get things up to snuff.

OK, thanks

Dave


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