Decide whether a purchase is an asset
Consider the company policy, expected useful life, materiality and control of the item. A computer used over several years may qualify for capitalisation; small consumables may be expensed. Follow the company’s approved policy consistently.
Set a supportable book estimate
Record acquisition cost, in-service date, useful life, residual value and depreciation method with evidence. The company can select whether depreciation begins in the acquisition month or the following month; document and apply that policy consistently.
Review changes and disposals
Keep component values separate where significant parts have different useful lives. Reassess estimates when circumstances change, and record disposals, impairment or revaluation through their dedicated accounting processes.
Reconcile to the tax schedule
Maintain tax depreciation separately from book depreciation. FBR classes, rates, tax-year rules and eligibility can change; confirm current published requirements with a tax adviser before using a schedule for a return.
Examples are illustrative, not tax or legal advice. Your accounting policies and local requirements may change the treatment.