Annual depreciation of equipment any ideas?

[Grommit]

Hi

 

Does any one know what the annual depreciation of equipment percentage is ?

Edited March 3, 2010 by Grommit

[LosOjos]

Do you mean literally what is it (i.e. a definition), or were you after the depreciation of a particular piece of equipment? It's usually set by somebody in finance, but if you've been asked to provide the depreciation for some equipment, then it depends on what it is as to how you can get a decent figure (it's all rather vague and not really much more than an educated guess anyway)

[ICT_GUY]

50% per year? A £300 PC would then be worth £300 £150 £75 £42.50 over a 4 year life span.

[timzim]

More complicated than that. That's why accountants earn more than IT Managers.

 

You can download a depreciation calculator spreadsheet - just Google "depreciation".

[ICT_GUY]

More complicated than that. That's why accountants earn more than IT Managers.

 

You can download a depreciation calculator spreadsheet - just Google "depreciation".

 

Not here they don't

[elsiegee40]

I'm pretty sure we do little more than:

cost of equipment / number of years we expect as lifespan.

 

So a £600 piece of equipment expected to last 3 years will be written off at £200 per year and have zero value if we continue to use it after three years.

 

Most of, if not all, our IT equipment gets written off over 3 years.

[somabc]

 

[ame=http://en.wikipedia.org/wiki/Net_present_value]Net present value - Wikipedia, the free encyclopedia[/ame]

[LosOjos]

It all depends on how accurate you want to be, there's no simple answer to this question.

 

Depreciation on a reducing line basis makes more sense to me in IT equipment, as the resellable value takes the biggest fall in the first couple of years (this would be ICT_Guy's method, though the percentage you use will depend on the equipment, life span etc.)

 

Fixed line derpreciation is the method elsiegee mentions, you simply reduce the value by a set amount each year until it's at the final value you think you'll be able to sell it for when you're going to get rid of it.

 

The net book value (NBV) of an item is the amount it is said to be worth each year after depreciation has been applied. Net Present Value (NPV) is essentiually the same as NBV, but takes real world factors such as inflation in to account and so is more accurate.

 

In short, there are 101 ways you could figure out the depreciation for an item, but in the end it's just an educated guess and you're probably best finding out what is the normal method in your school (speak to finance).

 

I knew those few years studying accountancy would be helpful one day lol.

[GrumbleDook]

I go for the fixed line depreciation where possible, but it is also worth speaking with your insurers to see how they determine it. You may have to play with two figures ... one for disasters and one for your refresh / sustainability program.

 

Then again ... if you are looking at it from a BSF point of view then you will have to ask teh owners the value they put on it as they will put additional costs on for the management of the kit that is there and the deployment of replacement kit. Just to confuse things a bit more.

[Grommit]

I go for the fixed line depreciation where possible, but it is also worth speaking with your insurers to see how they determine it. You may have to play with two figures ... one for disasters and one for your refresh / sustainability program.

 

Then again ... if you are looking at it from a BSF point of view then you will have to ask teh owners the value they put on it as they will put additional costs on for the management of the kit that is there and the deployment of replacement kit. Just to confuse things a bit more.

 

I have to as ICT Manager get the depreciation value of every piece of kit on site.....

[GrumbleDook]

Were you instructed by the school or the MSP? Who paid for the kit originally?

[Educare_AV]

I was told to try and find out what second hand equipment sells for on the likes of eBay to give you an idea.

Also to take print outs of the auctions as evidence for insurance etc.