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DEPRECIATION
DEPRECIATION ON FIXED ASSETS PURCHASED FOR LESS THAN A PRESCRIBED AMOUNT
  
Amounts of less fixed assets purchased for less than R() 1 000 may be written off in full. This amount is R() 1 000 at current, but the South African Revenue Services or relevant Tax Authority may change this amount from time to time.

When writing the depreciation off of this item, you need to leave a nominal value of R() 1 to indicate that the asset still exists in the business. For instance if a cellular telephone was purchased for the business at a cost price of R() 900, depreciation may be written off of R() 899. The nominal value of R() 1 will stay in the books until the cellular phone is lost, stolen, sold or disposed of. Only when the asset is disposed of, the value of R() 1 will be cleared when the profit or loss with the sale of the fixed asset is calculated.

Note that this depreciation amount is prescribed by the legislation and the amount may differ when the Tax Authorities issues new legislation or practice notes. In the United Kingdom (UK) different amounts may apply.

 

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