What is Depreciation?
Assets & Depreciation
Explained Simply
South African tax law (Income Tax Act, Section 11(e)) specifies depreciation rates for different asset categories. The two main methods are straight-line (equal annual amounts) and reducing balance (percentage of remaining value). For tax purposes, SARS prescribes rates: computers at 33.3% (3 years), office furniture at 16.67% (6 years), and vehicles at 20% (5 years). Accounting depreciation may differ from tax depreciation, creating deferred tax. Accounter calculates depreciation automatically based on asset details.
Free Tool
Depreciation Calculator
Calculate asset depreciation using straight-line, declining balance or sum-of-years-digits methods.
Related Terms
- Fixed AssetA fixed asset (also called a non-current or tangible asset) is a long-term physical asset owned by a business that is used in operations and not intended for sale, such as buildings, vehicles, machinery, or equipment.
- AmortizationAmortization is the process of spreading the cost of an intangible asset (such as a patent, trademark, or software licence) over its useful life, similar to depreciation for tangible assets.