HomeHome SearchSearch MenuMenu Our productsOur products

Do you know the lifespan of your company assets? Here's why you should

by , 10 July 2014
Depreciation is something that happens to every one of your company's assets. From desks, to chairs, to company cars, they all decrease in value over time.

And that's why when you want to calculate the rate of depreciation for your assets you need to know their lifespan.

Since every asset is different and gets different amounts of use, they don't all have the same lifespan. To help you with these calculations we're giving you the expected lifespan of a few common business assets...

*********** Hot off the press  ************
Be invisible to SARS
 
6 reasons SARS will audit you...
 
*************************************

Whether you use the 'straight-line' or 'reducing the balance' method you still need to know your asset's lifespan

 
Straight line and reducing the balance are both methods you can use to calculate depreciation. With both depreciation methods, you need to know the asset's lifespan. 
 
This because you use the asset's value and lifespan to work out the rate of asset depreciation. For example, a computer that cost R20 000, has a lifespan of three years and depreciates at a third of that value each year. 
 
That means its rate of depreciation is 33.33% and you apply that rate when calculating wear and tear allowance.
 
Now that you know why the lifespan of your asset is so important, here are the lifespans of a few of your common business assets...
 
*********** Top rated product  ***************
12 Taxable fringe benefits - are you taking advantage of all of them?

There are hundreds of companies out there that don't know which fringe benefits are taxable or they land up taxing the wrong percentage on them...

This kind of error could cost you thousands in penalties to SARS if it catches you out – and it will!
*****************************************

Here are the lifespans of common business assets

 
- Cell phones – lifespan of two years
- Computer mainframes or servers – lifespan of five years
- Personal computers (laptops and desktops) – lifespan of three years
- Purchased computer software (used in the main frame) – lifespan of three years
- Self-developed computer software (used in the main frame) – lifespan of one year
- Computer software for personal computers – lifespan of four years
- Fittings and furniture (e.g. desks and chairs) – lifespan of six years
- Electronic office equipment (e.g.) printers – lifespan of three years
- Photocopying equipment – lifespan of five years
 
There you have it: Now you can work out their rate of depreciations. To find out the lifespan of other business assets, check out the Depreciation chapter in the Practical Tax Loose Leaf Services.

Vote article

Do you know the lifespan of your company assets? Here's why you should
Rating:
Note: 5 of 1 vote


Related articles




Related articles



Related Products