Depreciation: How to spread the cost of your assets​

Most assets lose their value over time through wear and tear or becoming out of date. Depreciation is used to recognise this decrease in value and spread the cost of assets like computers and vehicles over their useful life.​

What is depreciation? 


Depreciation is a method of spreading the cost of big assets you buy for your business over time. You can claim a deduction for Inland Revenue approved depreciation rates in your income tax return. It's a bit like claiming expenses, but instead of claiming the total cost of the item, you claim the amount it depreciates each year.

Assets that depreciate

  • For tax purposes you must depreciate assets that:
  • are owned by the business and are available for business use
  • cost more than $500
  • have an expected life of more than 12 months.



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