When considering depreciation, the first question to answer is - do I use depreciating assets in my business?

Depreciating assets are assets that have a limited effective life and can reasonably be expected to decline in value over the time they’re used.

Depreciating assets are items like:

• tools and equipment (for example, electric sanders and saws)
• computers, laptops and tablets
• office furniture (freestanding)
• office equipment (for example, coffee machines) motor vehicles (for example, cars, vans and tractors).

Not all assets are depreciating assets. For example, land and trading stock.