Title: How to Record the Depreciation of Buildings in Accounting | Small Business - Chron.com
Headings: How to Record the Depreciation of Buildings in Accounting
How to Record the Depreciation of Buildings in Accounting
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Depreciation on a Building: Journal Entry
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Content: When you make improvements or upgrades to a building – adding a loading dock, widening the sales area, installing a new HVAC system – you depreciate those, too. Their useful life may range from 10 to 40 years. If the improvement extends the building's useful life – by replacing the roof, for example – you have to recalculate depreciation based on the new life span. You can simplify your accounting by treating the purchase price of an asset below a certain limit as a straight expense, AccountingTools advises. For example, Salt Lake Community College writes off building purchases as expenses unless they cost at least $250,000. This simplifies the accounting – you don't have to record accumulated depreciation on a building – but it makes the profits for the purchase period much lower on paper. The details of tax-deductible depreciation are different from GAAP rules. The experts at BKD report one big difference is that the IRS has rules allowing you to claim more depreciation in the first few years after the purchase. Accelerated depreciation lets you deduct more of the cost, though you'll have a smaller depreciation write-off later. ‒‒:‒‒
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