Calculate and record depreciation

The bakkie you bought this year won't be worth the same in three years, and your books should say so. "Depreciation" is the bookkeeping word for that wear and tear — spreading the cost of gear over the years you actually use it instead of taking the whole hit in one month. In stub it's a set-it-up-once affair: choose how, choose how long, and stub does the monthly maths from then on.

It pays off at tax season too: SARS allows wear-and-tear deductions on business assets, and books that already carry the write-down make that claim easy.

Turn on depreciation

1. Click Assets in the sidebar.
2. Open the asset.
3. Tick Add depreciation.
4. Choose the method:
   • Straight line — the same amount written off every year. Use this for most things.
   • Diminishing value — more written off early on, less later. Use this for things that lose value fastest when new, like vehicles and computers.
5. If you chose Diminishing value, enter the Annual depreciation rate as a percentage.
6. Set Starting on — the date depreciation should begin, usually the day you bought it.
7. Enter the Useful life in years — how long you realistically expect to get out of it. Three years for a laptop, five for a vehicle. (stub caps it at 20.)
8. Save.

A chart appears the moment you tick the box, showing how the value will fall month by month — sanity-check the curve before you save.

stub posts it for you

This is the part you never think about again. Once depreciation is on, stub writes a bit off every month from the start date, for the asset's useful life, or until you dispose of it. There is nothing to run at month end and nothing to post yourself — your books simply stay true.

See the effect

• The asset shows its Current value — what it is worth today after everything written off so far.
• Your Profit & Loss carries the monthly depreciation as a cost.
• Your Balance Sheet carries the asset at its written-down value.

Curious about the raw numbers? The Journal entry button on the asset lists every posting stub has made for it.

Change it later

Got the useful life wrong, or want a different method? Open the asset, change the method, rate, start date or useful life, and save.

Tip: Useful life is a judgement call, not a rule. Be realistic — if you replace laptops every three years, say three years, whatever the tax tables suggest.

Note: stub does not have a residual or scrap value field. Depreciation runs over the useful life you set.