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How to calculate depreciation on an LCD TV

Updated April 17, 2017

Business owners benefit from depreciation because it allows them to write off the cost of an expensive item over a period of years. LCD TVs and computers can be written off against profits if they are used solely for business. If not, then only a portion of the TV usage for business can be expensed. Either way, the depreciation calculation is identical.

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Review the formula for determining annual depreciation expense: Cost of the asset / Number of Years of Use.

Determine the years an LCD TV will be operational. In general, office equipment such as PC's and copiers are assumed to have a useful life of five years.

Determine the book value of the asset--minus any transaction costs associated with the purchase. For example, let's say the cost of the TV is £5,000. Calculate the depreciation expense: £5,000 / 5 = £1,000.

Adjust this figure for usage. For instance, if you personally use the LCD TV 25 per cent of the time, then only 75 per cent of the yearly depreciation expense can be written off. This would equal £750 instead of £1,000.

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About the Author

Edward Mercer began writing professionally in 2009, contributing to several online publications on topics including travel, technology, finance and food. He received his Bachelor of Arts in literature from Yale University in 2006.

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