What's the difference between accounting depreciation and tax depreciation?
There is a concept of accounting depreciation and there is a concept of tax depreciation.
Accounting depreciation is what's recorded in the accounting software used to generate special purpose financial reports.
Tax depreciation is what's recorded in LodgeiT depreciation modules and will fill the relevant sections of the tax form on posting depreciation.
In the reconciliation section of the tax form, the accounting depreciation is added back and the tax depreciation is deducted from accounting profit to deliver a tax profit value.
It's quite ok to use tax depreciation in the special purpose financial reports. In which case, the net impact of depreciation on tax profit vs. accounting profit is nil.
How to deactivate depreciation, or how to stopdepreication to show via tax form? Learn here
Can depreciation be posted back to accounting software from LodgeiT?
Not at this stage. We do have plans to allow LodgeiT to create journal entries from it's depreciation module. With certain software such a QBO,Xero & MYOB we will provision postbacks.
Why is it important to setup LodgeiT depreciation correctly?
LodgeiT automation is dependent on initial configuration conditions. Depreciation won't show up in the correct sectors of either tax forms or working papers if the setup is not handled correctly.
How to delete, edit, and/or rollback an asset?
Please refer on this guide to learn more.
Click HERE for ATO guide about tax depreciation methods and rules.