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, 04:45 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: 8
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, 05:40 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, 06:01 PM
picframer's Avatar
picframer picframer is offline
Andy
 
Join Date: Jan 2009
Location: Halifax, Nova Scotia
Posts: 2,885
Rep Power: 10
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, 06:25 PM
swstout's Avatar
swstout swstout is offline
Steve
 
Join Date: Jan 2009
Location: Canastota, NY
Age: 66
Posts: 1,082
Rep Power: 8
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, 07:20 PM
Little's's Avatar
Little's Little's is offline
Brandon
 
Join Date: Jun 2007
Location: Shasta Lake CA.
Posts: 814
Rep Power: 9
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, 05:52 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: 8
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, 06:33 PM
picframer's Avatar
picframer picframer is offline
Andy
 
Join Date: Jan 2009
Location: Halifax, Nova Scotia
Posts: 2,885
Rep Power: 10
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 06:35 PM.
Reply With Quote
  #8  
Old 03-18-2009, 04:14 AM
Steve's Avatar
Steve Steve is online now
Administrator
 
Join Date: May 2003
Posts: 37,457
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, 05:46 AM
picframer's Avatar
picframer picframer is offline
Andy
 
Join Date: Jan 2009
Location: Halifax, Nova Scotia
Posts: 2,885
Rep Power: 10
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, 08:22 AM
Steve's Avatar
Steve Steve is online now
Administrator
 
Join Date: May 2003
Posts: 37,457
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 06:25 PM
Equipment Red Panda Truck, Trailer, and Outdoor Power Equipment Discussion, Repairs. 9 10-09-2008 07:42 PM
New Equipment pnplawn Show Off - Picture Post - Photo Gallery 11 10-05-2007 07:00 PM
equipment VogelLawnService Show Off - Picture Post - Photo Gallery 13 03-08-2007 10:26 PM
Equipment F.A.Q.'s Steve Gopher Software Support Archived Question & Answers - Read Only 0 02-21-2005 06:08 PM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
Before & After tree...
COREtreeservice
Yesterday 09:20 PM
Yesterday 09:20 PM
by COREtreeservice
0 45
Dogs
Mr. Mow
06-29-2015 02:37 PM
Yesterday 11:28 AM
by Steve
6 1,787
Ready to learn and get...
Koley Lawn & Landscape
06-28-2015 05:16 AM
Yesterday 11:26 AM
by Steve
8 1,793
Three Stripe Land Care...
hammr04
06-30-2015 07:19 PM
Yesterday 11:24 AM
by Steve
1 57
Just about mid year, how...
GreenWorx
06-24-2015 07:05 PM
06-30-2015 07:41 PM
by hammr04
5 1,857
Country Life Lawn Care
darleneh
06-29-2015 11:24 AM
06-30-2015 01:25 PM
by Steve
3 1,710
Rubber mulch...
avetslawncare
06-24-2015 09:28 PM
06-29-2015 09:23 PM
by Chilehead
6 1,806
I dont know what to do...
Bradcook21
06-21-2015 08:49 AM
06-29-2015 02:30 PM
by Mr. Mow
11 2,041
Marketing ideas
xandrew245x
04-29-2014 06:35 AM
06-25-2015 07:11 PM
by GreenWorx
34 5,656
Never ending sod jobs
avetslawncare
06-05-2015 09:46 PM
06-25-2015 11:42 AM
by Steve
11 2,286
Weed and Feed Service...
mike94740
06-23-2015 05:50 PM
06-24-2015 09:56 PM
by avetslawncare
2 1,764
Trimming hedges / trees,...
Hard-Body lawn & garden
06-23-2015 07:08 PM
06-24-2015 09:59 AM
by Steve
1 1,759
Hi Everyone from Arkansas
KellyMarie
06-04-2015 04:16 PM
06-23-2015 01:34 PM
by KellyMarie
4 2,036
how to make customers...
Bradcook21
05-27-2015 05:04 PM
06-23-2015 06:36 AM
by GreenWorx
7 2,263
problems with a customer...
LawnCareMan280
06-16-2015 10:26 PM
06-22-2015 11:11 AM
by Steve
6 2,028
Please review this FREE...
markty
06-21-2015 07:42 AM
06-22-2015 11:00 AM
by Steve
1 1,784
A good commercial bid...
burtle
06-20-2015 09:09 PM
06-22-2015 10:56 AM
by Steve
1 1,845
What would you do with...
holymoly
06-20-2015 06:48 PM
06-22-2015 10:48 AM
by Steve
1 1,781
New Member just joined...
vgoleco@hotmail.com
06-19-2015 03:49 PM
06-22-2015 10:42 AM
by Steve
2 1,821
Credit Cards - What's in...
Shark1611
06-16-2015 03:04 PM
06-21-2015 07:24 PM
by Chilehead
4 1,910
Blade usage
Wolf4dk
06-16-2015 12:18 AM
06-21-2015 05:35 PM
by kslawn
4 1,925
Hello, I am new to the...
adamslawnservices
06-17-2015 08:06 PM
06-19-2015 10:28 AM
by Steve
3 1,853
Is it too late to do...
markty
06-16-2015 05:28 PM
06-19-2015 10:22 AM
by Steve
4 1,919
First commercial bid
SGL1
06-12-2015 08:57 PM
06-18-2015 05:04 PM
by SGL1
9 2,280
Needing a website built
burtle
06-17-2015 09:02 AM
06-18-2015 11:02 AM
by Steve
7 1,994
I have been rude and...
biglee
06-15-2015 10:11 PM
06-18-2015 10:46 AM
by Steve
10 2,079
Start LIKING FACEBOOK...
rlclawncare123
02-26-2015 12:06 AM
06-17-2015 08:38 AM
by burtle
9 3,173
Customer keeps adding...
Mr. Mow
06-13-2015 06:22 AM
06-16-2015 10:23 AM
by Steve
11 2,138
Pass discounts onto...
burnell76
06-03-2015 06:33 PM
06-16-2015 10:02 AM
by burnell76
3 2,015
burned grass only where...
nhauto
06-15-2015 05:28 PM
06-16-2015 09:45 AM
by Steve
2 1,887
Half year mark review.
Steve
06-02-2015 11:24 AM
06-15-2015 01:04 PM
by Steve
18 2,599
These are the days on...
ExtremeLawncareServices
01-11-2015 10:41 AM
06-15-2015 01:01 PM
by Steve
86 9,644
New Member
Bruce Fehr
06-05-2015 07:13 PM
06-15-2015 12:53 PM
by Steve
6 2,020
New to the business,...
CarefreeMowing
06-12-2015 02:36 PM
06-15-2015 12:50 PM
by Steve
1 1,901
Beginner Mistakes:...
Steve
01-31-2007 11:45 AM
06-13-2015 08:48 AM
by holymoly
45 11,979
New to the forum, new to...
CarefreeMowing
06-11-2015 12:35 PM
06-12-2015 10:44 AM
by Steve
2 1,821
problems with a customer
LawnCareMan280
05-19-2015 06:28 PM
06-11-2015 10:50 PM
by stallman419
8 2,371
Website Review
Outdoordesignsknox
06-08-2015 08:44 PM
06-11-2015 09:48 PM
by Just for Cuts
13 2,249
another newish job for me
holymoly
06-07-2015 08:34 AM
06-11-2015 10:05 AM
by Steve
8 2,041
Anyone need help? I have...
biglee
05-06-2015 12:22 PM
06-10-2015 01:45 PM
by holymoly
15 2,957
Hello from the GREAT...
gbfarmsllc
06-09-2015 11:10 AM
06-10-2015 01:29 PM
by Sprinkler Buddy
2 1,890
Hey guys and gals, I'm...
Joeyhall
06-03-2015 03:54 PM
06-08-2015 02:15 PM
by chris2500hd
8 2,136
Mowing Bermuda...
Mr. Mow
06-02-2015 12:45 PM
06-08-2015 12:45 PM
by Steve
12 2,289
Hey Guys
PrattLandscaping
06-07-2015 06:37 PM
06-08-2015 12:23 PM
by Steve
2 1,905
Share your stolen...
SGL1
05-27-2015 09:05 PM
06-08-2015 11:54 AM
by Steve
25 2,837
Hello there My name is...
zwalk1839
06-04-2015 11:10 PM
06-08-2015 11:52 AM
by Steve
4 2,018
Laid off oil field...
Mr. Mow
05-30-2015 09:03 AM
06-08-2015 06:20 AM
by Mr. Mow
4 2,126
How do you find one time...
Greg'slawnandlandscape
06-02-2015 09:57 PM
06-05-2015 09:49 PM
by avetslawncare
4 2,050
Show us your stripes
Just for Cuts
05-21-2015 03:07 PM
06-04-2015 05:24 PM
by ExtremeLawncareServices
6 2,351
Replacement Parts -...
nicholas-KC
08-16-2014 08:40 AM
06-04-2015 11:45 AM
by Steve
9 3,839
» Popular Tags
ad landscaping advertising apartment complex apartment lawn care estimate applying bark billy goat brushcutter blowout bob villa collections commercial curb appeal services demonstration design door hangers edging employee problems equipment dealer equipment rental facebook foreman free advertising free lawn care google growing a lawn care business hardscapes hills how to husqvarna increase customers jobs landscape landscape services landscaping lawn aeration lawn care lawn care busines plan lawn mowing marketing marketing secrets more customers business mr dave new business ordinance past due patio install per hour service plowing pricing push versus ride scripts secrets to landscaping shell shreaded small engine repair snow plowing sq ft square foot trailer trailer mate pro tree tree pics trimmer rack up sell employee web design website website design winterization wood www.greenturion.co.za
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 12:38 PM.


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

All times are GMT -5. The time now is 12:38 PM.

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