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Immediate depreciation for the investment boost policy (NZ)

The NZ government has introduced changes to allow a 20% depreciation in the first year of acquisition for qualifying assets. Here's how to process that in MYOB Acumatica.

The NZ government recently announced an initiative to allow businesses to instantly depreciate 20% of a newly-purchased asset's value, in addition to normal depreciation.

For more information on the policy, see Inland Revenue — New assets: Investment Boost.

MYOB Acumatica's depreciation feature doesn't let you easily change an asset's depreciation schedule — you can only calculate depreciation at the percentage specified on the asset itself over its lifetime. Because of this, the best way to calculate the investment boost on an eligible asset is by splitting the asset into two different assets:

  • One asset to complete the immediate depreciation of the asset for the investment boost policy.
  • Another parent asset to calculate the rest of the depreciation at the standard rate until the end of its useful life.

Setting up an asset for investment boost depreciation

After setting these assets up, the Investment Boost asset will fully depreciate in the first year of use, and the Parent Asset will calculate depreciation at the correct rate - less the investment boost amount.

For more help setting up fixed assets, see MYOB Acumatica Online Help — Fixed Assets.

  1. Go to Fixed Assets(FA303000).
  2. Create the first new asset record. This parent asset record represents the portion of the asset that will be depreciated in the normal way.
    • Name the asset normally e.g. "Tractor"
    • Set the Acquisition Cost of this asset to be the full purchase amount, less the investment boost amount.
    • Set the other fields as you normally would — Useful Life, Salvage Amount, Business Use %, etc.
    • Go to the Balance tab and select the depreciation percentage and method (likely NZ Straight-Line or NZ Diminishing Value) as you normally would.
  3. Create a second new asset record. This record represents theportion of the asset that is immediately depreciated under the investment boost policy.
    • Name the asset so it is clear that this is the portion that is depreciated in the normal way e.g. "Tractor - investment boost".
    • Set the Acquisition Cost of this asset to be the investment boost amount (20% of the value).
    • In the Parent field, select the first asset.
    • Set the other fields as you normally would — Useful Life, Salvage Amount, Business Use %, etc.
    • On the Balance tab, set the Percent per Year to 100%, and select the depreciation method that matches the first asset.

Example

A business owner has purchased a new $2500 deep fryer that qualifies for instant depreciation under the investment boost policy.

Parent asset:

  • Name: Deep fryer
  • Acquisition Cost: $2000
  • Percent per Year: 13.5%

Investment boost portion:

  • Name: Deep fryer - investment boost
  • Acquisition Cost: $500
  • Percent per Year: 100%

Processing the depreciation transaction

If you purchased the asset part-way through the financial year, then the investment boost depreciation may not calculate the full amount by the end of the year.

If this is the case, go to Fixed Assets Transactions and enter a manual transaction for the full depreciation amount.

In this case, make sure you don't process automatic depreciation transactions for the investment boost portion.