What is amortization?
Amortization is the process of spreading the cost of a business asset over the years you use it, rather than deducting the full amount in the year of purchase. As a self-employed professional, when you invest in something intended to last several years (such as a car, a computer, a building, or equipment), Accountable helps you track and apply the correct amortization automatically. For more background on how amortization works, see the amortization guide on the Accountable blog.
The government recommends the following periods:
Land & Construction: 30 years
Development / Landscaping: 10 years
Furniture & Material: 4 or 5 years
Technology: 2 or 3 years
Vehicle (new): 5 years
Vehicle (second hand): difference between the original purchase date and 5 years
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For Natural Person Self-Employed, amortization of an asset always starts on the 1st of January. This means that, even for a purchase made mid-year, you will benefit from the full year of deductibility.
Accountable automatically suggests a timeframe to amortize your purchases based on the category you select.
Please note that this article provides general guidance only. Tax rules may vary depending on your individual situation. When in doubt, ask your Tax Coach.
This article also covers how to add assets purchased before you started using Accountable, how to manage and edit your amortization table, and how to handle asset sales, losses, or theft.
How do you add an asset to your account?
Add an expense for a purchase of goods and follow these 2 steps:
Select the number of years in the amortization field (automatically suggested).
Enter a name for your asset.
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Add an asset purchased before using Accountable
It is possible to add previously purchased assets to your accounting in Accountable.
Enter the expense with the original purchase date and amortization period. Accountable calculates the deductible values for the current year and adds them accurately to your tax return for that year. Find all the detailed steps in the article on how to add existing assets under amortization in Accountable.
How do you manage and edit assets in your account?
You can access your amortization table from Settings > Amortization.
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Case 1: You want to sell an asset in the app
From the amortization table, select the asset you would like to sell.
You will get two options:
If you have already created an invoice for this sale, choose 'Link to an existing sales invoice' and select the related invoice before pressing 'Link to item'.
If you have not yet created an invoice, select 'Create a new sales invoice', fill in the required fields, and Accountable will automatically create the link between the investment and the purchase.
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Case 2: Your asset is broken or stolen
From the amortization table, select the asset you would like to mark as broken or stolen.
Click on 'Change item details' and then select 'Mark asset as lost/broken'.
Choose the date when the event occurred. Accountable will then take all necessary actions automatically.
Key takeaways
Amortization spreads the cost of a business asset over its years of use. Accountable suggests the right period automatically based on the asset category.
To add an asset, create an expense, select the amortization period, and give the asset a name.
Assets purchased before you started using Accountable can be added retroactively with the original purchase date.
Manage all your assets from Settings > Amortization, where you can sell, mark as lost, or mark as broken.
Need help? Chat with us or email support@accountable.eu, we're happy to help.