[GNC] An automated depreciation calculator would be really helpful.

[davidcousens49 at gmail.com]

Dave,

Depreciation rules are generally set by your taxation system and your accountant
will likely be reflecting those rules that apply in your jurisdiction. If you
are going to do the depreciation calculations then you will need to become
acquainted with the rules in your jurisdiction. Rules may also be different for
particular capital items and asset classes. If your taxation authority is nice
they will have published the rules on line. From the little I have read
depreciation is not an allowable business expense for tax purposes in the UK -
check that with your accountant though.

I personally used to maintain a spreadsheet for each major capital item I was
depreciating and similarly for items which could be pooled under the
depreciation rules and perform all the necessary calculations in the spreadsheet
and just record the resulting figures as required in my accounting program (not
GnuCash in the days when I was still running a business). 

I suspect depreciation rules vary considerably in detail from jurisdiction to
jurisdiction making it difficult to define a general calculator which will work
adequately across all jurisdictions. It is a bit like loan repayment
calculations, they will likely come out pretty close but the methodology has to
be exactly the same to get the same result.

It should be possible to use the transaction file association to link the
transactions to a depreciation spreadsheet data file, which since most OS's can
initiate a program based on the file extension should allow the spreadsheet
program to be launched from the file association - haven't tested this out for a
spreadsheet but it does work for pdfs on Linux.

David Cousens


On Thu, 2021-12-09 at 00:34 +0000, Dr. David Kirkby wrote:
> A friend of mine bought some Excel spreadsheets for his company accounts.
> He has used them for many years and finds them good. He has suggested I use
> them, but I'm not keen on that idea. At any point in time he can see
> exactly what the depreciation of an item is, and so exactly when the value
> has fallen to zero.
> 
> I read about depreciation in GnuCash at
> 
> https://cvs.gnucash.org/docs/C/gnucash-guide/chapter_dep.html
> 
> but it seems rather limited. The last paragraph on this page
> 
> https://cvs.gnucash.org/docs/C/gnucash-guide/dep_accounts1.html
> 
> says
> 
> "The actual input of the depreciation amounts is done by hand every
> accounting period. There is no way in *GnuCash* (as of yet) to perform the
> depreciation scheme calculations automatically, or to input the values
> automatically into the appropriate accounts. However, since an accounting
> period is typically one year, this really is not much work to do by hand."
> 
> I don't think it's true to say it's not much work to do. I know my
> accountant says one should start depreciating from the day something goes
> into service, but he uses a different scheme, which is good enough. If an
> item is purchased before the halfway through the month, he considers it
> purchased on the 1st of that month, and if after 50% of the way though the
> month, he considers it purchased the following next month. The errors in
> this should be small.
> 
> So each time an asset is purchased, one needs to start depreciating it from
> then. It's not true to say this is just done once per year.
> 
> Of course, I'm well aware that many people will have suggestions on how to
> improve the software, and the developer's time is limited. But some
> automated way of depreciating items would be very useful. As they say, if
> you don't ask you will not get, so there's no harm in asking!
> 
> Dave
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