Hi All,
Our company is planning to establish a low-value pool for the fixed assets this year, and we would like to setup the related depreciation calculation in our accounting system as well.
From my understanding, the diminishing depreciation method will be applied to the low-value pool for: i) low cost assets allocated in current year with 18.75%; ii) prior year ending balance with 37.50%.
Regarding the diminishing depreciation calculation, I have the questions below which I would like to get cleared before setting the pool up in the system:
i) As assets are allocated to the pool, do we still need to calculate the depreciation on a separate asset basis?
ii) Do we still need to determine the useful life of each low cost assets in the low value pool? If not, does it mean that we just need to keep depreciating 37.5% of prior year balance of that asset until its net book value reaches $0 (or say, close to $0)?
iii) If we sell / dispose of one of the asset in the low value pool, how should we calculate the disposal value of it?
Thanks for the reply in advance and looking forward for the reply!
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