Why depreciation needs a schedule
When you buy equipment, a vehicle or a computer, it keeps working for years. Depreciation spreads its cost over that useful life instead of charging it all in the month you paid. A schedule records how much to expense each period and what the asset is still worth on your books.
That book value goes on your balance sheet, and each period's depreciation expense goes on your income statement. Under IFRS this is covered by IAS 16, Property, Plant and Equipment.
Straight-line or double declining balance?
- Straight-line: (cost − salvage value) ÷ useful life. The same charge every period. It suits assets that wear out evenly, like furniture or buildings.
- Double declining balance: twice the straight-line rate, applied to the remaining book value. Charges are highest early on and shrink over time, which suits technology and vehicles.
Tax rules can differ from accounting rules. In the US, for example, tax depreciation follows the IRS system described in Publication 946, so check with your adviser before using a schedule for a tax return.
How to build your schedule
Name the asset and the account it belongs to, such as office equipment. Choose monthly or yearly periods, then enter the purchase cost, useful life in periods, purchase date and expected salvage value. Once the details are complete, pick a method and the schedule appears.
Each row shows the period, its date, the depreciation expense, the running total and the remaining book value. Export the schedule to Excel to keep it with your fixed asset records.