When should you depreciate a purchase?
A purchase is generally considered a business asset when it will be used for several years and exceeds the applicable tax threshold for investments.
First, make sure that the purchase has been recorded correctly in Shine and assigned to the appropriate ledger account.
For example:
A laptop or other business asset can be recorded in an account for fixed assets.
A company car can be recorded in an account for vehicles.
The appropriate ledger account and depreciation method depend on your specific situation. If you're unsure, check with your accountant or tax adviser.
How do you calculate depreciation?
To determine the annual depreciation amount, consider:
the purchase value of the asset;
its expected useful life;
any expected residual value;
the date the asset was put into use.
If you purchased the asset during the year, you generally only depreciate it for the period in which it was actually in use.
Please note: VAT is not calculated on the depreciation itself. VAT is handled when the original purchase is recorded.
How do you record depreciation in Shine?
You can record the depreciation as an accounting entry in Shine.
Go to Accounting in the main menu.
Create a new accounting entry.
Enter the date of the depreciation.
Add a clear description, for example Depreciation laptop 2026.
Select the appropriate ledger accounts for the depreciation expense and accumulated depreciation.
Enter the depreciation amount.
Review the entry and save it.
Once the entry has been recorded, the depreciation expense will be included in your accounts and the book value of the asset will be adjusted accordingly.
💡 Tip: Always check that the original purchase amount, ledger accounts and depreciation amount are correct before saving the entry.