Would it be acceptable to depreciate in 12 equal monthly amounts of £416.67 (£5000 / 12) or must each month's new written-down-value be used to calculate each month's depreciation.
The latter seems very pedantic, and the former would be far simpler.
Also, would you be so precise as to quote pence, as above, or just put down a rounded down/up figure and adjust with the last month's deprecaition?
Remember depreciation is just an accounting estimate of what the reduction in the value of an asset has been over a period. You can depreciate at whatever rate you think is most relevant (although you obviously have to add it back when doing tax comps, and use the taxmans rate for capital allowances instead).
It's fine to depreciate in 12 monthly installments, and it's personal preference again if you want pences included. If using sage, I would just plug the £416.67 as a recurring entry each month to the depreciation a/c.
When posting depreciation each month, I always base it on one 12th of the annual amount. The only time you need to adjust it is when you purchase an asset part way through the year. For example if you bought it at the start of month 4, you would need to account for the 3 mths you havent yet accounted for. You would just just divide the annual depn amt by 9, and charge one 9th each month.
