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If I buy a new computer for work purposes, does the cost need to go through as a loss in the P&L?

  • 29-09-2021 6:56am
    Registered Users Posts: 4,850 ✭✭✭

    Hi all,

    As per the title, or can it be put through as eg a depreciating asset in order to keep the year's profit higher?

    Thanks very much.


  • Registered Users Posts: 5,763 ✭✭✭The J Stands for Jay

    Unfortunately, the answer is "it depends". Will the computer be in use for a number of years, and will it still have a value at the end of each year? Is the cost material to the company?

  • Registered Users Posts: 4,850 ✭✭✭Cianos

    Yes it'd be in use for a number of years and would retain some resale value (eg iMac)

    By cost material do you mean the depreciation? Purchase and any costs would be to the company indeed yeah.

    Thank you

  • Registered Users Posts: 848 ✭✭✭duffysfarm

    A new computer goes to the balance sheet as an addition. You choose the depreciation rate, probably 33% would be best. This is then added back to the profits for tax purposes and you get to claim capital allowances at 12.5%-you have to use this rate.

  • Registered Users Posts: 28 veil

    Is an asset, since it has an economic life span and scrap value, so I think you should apply a suitable rate for depreciation purposes, which of course you have to post to the income statement account (p&l) by debiting it and also the asset account by crediting it ( fulfill the double entry rules(ledger posting)).