Lawn Care Business Forum Lawn Care Business Book Lawn Care Business Blog Lawn Care Software
Home Forum Contract & Flyer Templates Blog Software Videos Podcast Calculators / Estimators Store Mower Review Design It Yourself Lawn Business School

Go Back   GopherHaul Landscaping & Lawn Care Business Marketing Forum > Business > General Business Discussions

General Business Discussions A place to talk about general business discussions.

Equipment depreciation


General Business Discussions

A place to talk about general business discussions.
Reply
 
Thread Tools Search this Thread
  #1  
Old 03-16-2009, 05:45 PM
Lukacs Property Maintenance's Avatar
Lukacs Property Maintenance Lukacs Property Maintenance is offline
Senior Member
 
Join Date: Jun 2008
Location: Lower Nicola, BC
Posts: 138
Rep Power: 7
Lukacs Property Maintenance is on a distinguished road
Question Equipment depreciation

Hey guys,

Have a question for you all. How important is equipment depreciation and how do you calculate it. As an example how would i calculate the depreciation of my John Deere 125 lawn tractor. It is about 1 year old.

I don't know how this factors into the books.

Mike

Any help is greatly acepted. Thanks
Reply With Quote

Stop guess-timating. Learn how to estimate and make money! $$$
Mow Time Estimator Lawn Care Price Estimator Mulch and Topsoil Calculator Snow Plow Estimate Calculator


  #2  
Old 03-16-2009, 06:40 PM
justin_time justin_time is offline
Justin
 
Join Date: Apr 2006
Location: French River, ON, Canada
Age: 29
Posts: 1,801
Rep Power: 0
justin_time is on a distinguished road
Default

Lawn care business tipsLawn Care Business Book
I think it's 30%.. not sure tough
Reply With Quote
  #3  
Old 03-16-2009, 07:01 PM
picframer's Avatar
picframer picframer is offline
Andy
 
Join Date: Jan 2009
Location: Halifax, Nova Scotia
Posts: 2,885
Rep Power: 9
picframer will become famous soon enough
Default

Genrerally Accepted Accounting Principals for Computers and Equipment is 20% per year.
Reply With Quote
  #4  
Old 03-16-2009, 07:25 PM
swstout's Avatar
swstout swstout is offline
Steve
 
Join Date: Jan 2009
Location: Canastota, NY
Age: 65
Posts: 1,082
Rep Power: 7
swstout is on a distinguished road
Default equipment depreciation

This might help.
https://www.ird.govt.nz/cgi-bin/form.cgi?form=depnrates

Steve
Reply With Quote
  #5  
Old 03-16-2009, 08:20 PM
Little's's Avatar
Little's Little's is offline
Brandon
 
Join Date: Jun 2007
Location: Shasta Lake CA.
Posts: 814
Rep Power: 8
Little's is on a distinguished road
Default

My tax person told me here in CA. the dep. is the value spread over 5 years.
__________________
Northern California
Reply With Quote
  #6  
Old 03-17-2009, 06:52 PM
Lukacs Property Maintenance's Avatar
Lukacs Property Maintenance Lukacs Property Maintenance is offline
Senior Member
 
Join Date: Jun 2008
Location: Lower Nicola, BC
Posts: 138
Rep Power: 7
Lukacs Property Maintenance is on a distinguished road
Default

anyone else from Canada have any more things to add about depreciation?

Mike
Reply With Quote
  #7  
Old 03-17-2009, 07:33 PM
picframer's Avatar
picframer picframer is offline
Andy
 
Join Date: Jan 2009
Location: Halifax, Nova Scotia
Posts: 2,885
Rep Power: 9
picframer will become famous soon enough
Default

Quote:
Originally Posted by Lukacs Property Maintenance View Post
anyone else from Canada have any more things to add about depreciation?

Mike
What other things would you like to know? I have my MBA and am a CGA, will answer your questions if you can be a little more specific.

Deprecation is used to reduce the tax your company may have to pay, falls below the line as a non cash item, when looked at by a financing company.

For a company that is or even a company that is not making money it is very important to report as you can carry forward tax loss(s) or offset profit.

Last edited by picframer; 03-17-2009 at 07:35 PM.
Reply With Quote
  #8  
Old 03-18-2009, 05:14 AM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 36,688
Rep Power: 10
Steve has disabled reputation
Default

Quote:
For a company that is or even a company that is not making money it is very important to report as you can carry forward tax loss(s) or offset profit.
I think this is a very important concept that is not widely understood. Could you tell us a little about what that means? How does that help the average lawn care business owner?

Also for the new lawn care business owner what is equipment depreciation?
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
  #9  
Old 03-18-2009, 06:46 AM
picframer's Avatar
picframer picframer is offline
Andy
 
Join Date: Jan 2009
Location: Halifax, Nova Scotia
Posts: 2,885
Rep Power: 9
picframer will become famous soon enough
Default

Quote:
Originally Posted by Steve View Post
I think this is a very important concept that is not widely understood. Could you tell us a little about what that means? How does that help the average lawn care business owner?

Also for the new lawn care business owner what is equipment depreciation?
As always it is best to contact an accountant in your area who knows your Provincial or State tax rules, here is a general explanation that would fit pretty much anywhere in North America, quite often you will read in a financial statement they were prepared with generally accepted accounting principals, again generally speaking.

Our governments basically set the tax rules at the Feredat level then the province or state will piggy back onto that rule, for example if the Federal Government here were to tax you at 20% on profits, in Nova Scotia the Provincial Government would tax you on the amount owing to the Federal Government, this is your total business tax.

When we buy a piece of equipment, generally speaking one can write off any amounts $500.00 or less at 100% in the year they were purchased anything above that it is generally accepted that a piece of equipment has a life of five years (not to be confused with how many years you can get out of that piece), thus you can reduce your business income by 20% of the purchase price, less any tax you paid until the full value is NIL, this same rule is used by most companies that trade on the exchanges.

Every company has a balance sheet, this lists amoung other things Capital assets and owners contributions. In year one the purchase price less sales tax is shown at the full value of the item until the company year end at which time you depreciate and record depreciation, we consider it a non cash journal entry if you will however it reduces your company income and thus the taxable income, if you record a loss you can carry it forward to future years profits.

I don't want to get complicated but tax losses are sometimes sold to companies that have very large profits, when I worked in gold exploration we had no income, we were funded by shareholders and new shareholders, our tax loss(s) were in the millions per year, we could sell these to for example a mining company that had large profits, not a 100% but at a %.

In our case if we had tax loss(s) and I am not sure what the rules are in the USA, it is considered an asset and the purchasing company would pay an amount for those loss's as they can apply them towards profits.

So in summary the reason for all this is it's required book keeping and should you ever go for financing, if it is not present it could show that one is not keeping proper accounting records.

Andy
Reply With Quote
  #10  
Old 03-18-2009, 09:22 AM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 36,688
Rep Power: 10
Steve has disabled reputation
Default

This is great stuff!

Quote:
it reduces your company income and thus the taxable income, if you record a loss you can carry it forward to future years profits.
What does that mean to the average lawn care business owner?

Can you help me with an example to better explain it?

Say my lawn care business just started up and I spent $15,000 in expenses for marketing or other things I needed to get going. But I only made $10,000 in income, I lost $5,000 my first year. How does having a loss help me in the future years?

Also, does the 5 year depreciation cover vehicles and trailers?

Do you have any thoughts on when it is better to buy vs. lease equipment. Or lease and then buy at the end of the lease?
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Equipment. Sean70 Starting a lawn care business. 3 03-13-2009 07:25 PM
Equipment Red Panda Truck, Trailer, and Outdoor Power Equipment Discussion, Repairs. 9 10-09-2008 08:42 PM
New Equipment pnplawn Show Off - Picture Post - Photo Gallery 11 10-05-2007 08:00 PM
equipment VogelLawnService Show Off - Picture Post - Photo Gallery 13 03-08-2007 11:26 PM
Equipment F.A.Q.'s Steve Gopher Software Support Archived Question & Answers - Read Only 0 02-21-2005 07:08 PM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
Stander Vs. Zt
totalscape
12-20-2014 07:57 PM
Today 05:42 AM
by Billy Goat
6 138
Complete body therapy...
zermin
Yesterday 11:51 PM
Yesterday 11:51 PM
by zermin
0 27
Repair or replace the...
lxarth
12-17-2014 05:07 PM
Yesterday 09:46 PM
by Just Cuts
10 319
Facebook
element009
03-23-2011 09:36 AM
Yesterday 04:33 PM
by stevef1201
38 9,909
Ideas on a large bid
Knaubone
Yesterday 11:57 AM
Yesterday 11:57 AM
by Knaubone
0 49
what do you "love" to...
calebmoss
07-06-2011 10:05 PM
Yesterday 12:52 AM
by rmccutchan
31 9,074
I'm BACK!
SuperiorPower
12-16-2014 11:08 PM
12-20-2014 11:33 PM
by SuperiorPower
7 267
These are the days on...
ExtremeLawncareServices
03-22-2014 10:12 AM
12-19-2014 09:45 PM
by ExtremeLawncareServices
189 16,781
Georgia Boys!
Chilehead
12-18-2014 10:23 PM
12-19-2014 09:36 PM
by Chilehead
2 129
Employee job training...
brookline
12-15-2014 08:15 PM
12-19-2014 07:48 PM
by SuperiorPower
9 375
Hello from Md
homey
12-17-2014 06:55 PM
12-19-2014 06:00 PM
by homey
5 219
Has Obamacare helped or...
Steve
12-18-2014 04:37 PM
12-19-2014 05:43 PM
by stevef1201
3 153
What Fertilizer to Use?
acrajchel
04-07-2014 02:56 PM
12-17-2014 01:11 PM
by Steve
23 3,028
Grass hopper mower
ExtremeLawncareServices
12-05-2013 09:51 AM
12-17-2014 09:40 AM
by SuperiorPower
34 6,180
Peco Bagger
AGPS
11-18-2014 02:20 PM
12-17-2014 09:13 AM
by SuperiorPower
15 1,393
New to Gopher Haul-from...
323k13l
12-12-2014 10:34 PM
12-15-2014 02:58 PM
by Steve
3 344
hi
creteland
12-12-2014 09:06 AM
12-15-2014 01:45 PM
by Steve
5 335
New addition to my small...
googus
12-12-2014 07:36 PM
12-15-2014 07:47 AM
by googus
4 412
Ferris IS700Z
rmccutchan
12-14-2014 01:10 AM
12-14-2014 11:41 PM
by rmccutchan
4 307
Charge what the market...
Billy Goat
12-09-2014 12:39 PM
12-14-2014 06:39 PM
by biglee
20 857
Hi from IL
steveinil
11-25-2014 02:07 PM
12-12-2014 07:18 AM
by steveinil
4 851
Utility Company Right of...
eastsidelandcare
12-11-2014 04:54 PM
12-11-2014 04:54 PM
by eastsidelandcare
0 322
leaf removal
Double J LLC
10-03-2014 05:24 PM
12-11-2014 04:50 PM
by eastsidelandcare
33 4,161
suggestions on full lawn...
Brian3137
12-10-2014 07:18 PM
12-11-2014 03:41 PM
by Steve
6 435
new to me box truck
jrayb39667
03-06-2014 11:20 PM
12-11-2014 09:43 AM
by Sprinkler Buddy
18 3,442
Hello from SW FL!!
5StarLawnscaping
12-05-2014 02:35 PM
12-10-2014 02:45 PM
by WesleySnips
7 680
Echo pb200 blower fuel...
googus
12-06-2014 09:03 PM
12-09-2014 06:35 PM
by Steve
3 531
Are you prepared for the...
Steve
12-02-2014 04:13 PM
12-09-2014 06:22 PM
by Steve
7 948
Email Address Name
Just Cuts
12-07-2014 09:49 PM
12-08-2014 03:15 PM
by Steve
3 478
Inspection form
stevef1201
12-07-2014 10:38 AM
12-08-2014 03:10 PM
by Steve
1 473
Truck, Trailer,...
hawthornelawncare
12-23-2011 01:01 AM
12-08-2014 12:37 PM
by jrs.landscaping
108 34,299
Back Pack Blower
Ian Lovejoy
11-09-2014 08:41 AM
12-07-2014 06:35 PM
by stevef1201
24 1,776
Innovation by mandate
bayoubandit
11-29-2014 01:33 PM
12-06-2014 03:27 PM
by SGL1
12 1,024
Trying something new,...
ExtremeLawncareServices
09-21-2014 10:07 PM
12-05-2014 11:06 AM
by Steve
9 2,310
Good help is hard to find
Hanks Lawn Care Services
11-19-2014 03:27 PM
12-04-2014 01:32 PM
by stevef1201
15 1,499
How many hours is too...
Just Cuts
12-04-2014 09:00 AM
12-04-2014 01:02 PM
by Just for Cuts
6 666
Does this sound like a...
googus
12-03-2014 07:47 AM
12-04-2014 12:37 PM
by Steve
5 737
New website
Chilehead
11-20-2014 04:39 PM
12-04-2014 12:27 PM
by Steve
14 1,274
New website
SGL1
12-02-2014 10:55 PM
12-03-2014 11:17 PM
by BLC7
19 904
Websites, how long...
Dan Tanner
03-09-2014 08:29 AM
12-03-2014 11:12 PM
by SGL1
21 3,296
I Want to buy old...
ExtremeLawncareServices
10-10-2014 11:04 PM
12-03-2014 10:36 PM
by ExtremeLawncareServices
8 1,918
GPS trackers for...
Billy Goat
12-02-2014 06:09 PM
12-03-2014 07:17 PM
by Steve
8 763
My site is on fronts page
tbtigers03
11-14-2014 05:58 PM
12-03-2014 06:31 PM
by SGL1
17 1,501
Hiring Subs over Temps
Billy Goat
12-02-2014 06:26 AM
12-03-2014 01:24 PM
by Steve
3 680
Thanksgiving cards
Steve
11-10-2008 11:57 AM
12-02-2014 11:11 PM
by SGL1
11 9,571
New parking area
ExtremeLawncareServices
11-07-2014 09:47 PM
12-02-2014 02:17 PM
by jrs.landscaping
12 1,530
Pressure Washing...
WesleySnips
07-31-2014 07:13 PM
12-02-2014 08:47 AM
by SGL1
6 1,553
old contracts
bayoubandit
11-29-2014 11:10 AM
12-01-2014 11:20 AM
by Steve
3 745
Hi to you NOTHERNERS
stevef1201
11-11-2014 05:56 PM
12-01-2014 10:54 AM
by Steve
9 1,322
Lawn care truck
Steve
10-10-2009 03:40 AM
12-01-2014 10:45 AM
by Steve
32 15,236
» Popular Tags
4wd aerocore apartment bid apartment lawn care estimate applying auger bid bob villa bush christmas commercial decorating deliquentaccounts demonstration ditches employee problems ferris first truck georgia gopherhaul grass hardscapes hiring how much to charge how to hydraulic installation introduction john deere quik trac landscape services lawn lawn care lawn care busines plan lawn care business lawn care business seo lawn care business show lawn care business website lawn care business website seo lawn care seo lawn care website lawn care website seo managing a lawn care business marketing mowing mulch mulch price new business ordinance patio install per hour charge podcast profit on employee reo scag v-ride shell snow plowing starting a business starting a lawn care business start up lawn care business steep lawns steve sulky theft toro tractor auger trailer mate pro tree turfgrass consulting walk behind wright stander rh
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 09:33 AM.


(C) 2011 Riggs Publications - Terms of use & Privacy Policy

All times are GMT -5. The time now is 09:33 AM.

(C) 2011 Riggs Publications - Terms of use & Privacy Policy