Guide
Assets and depreciation in plain words
Fixed and minor assets, accounting and tax depreciation, depreciation groups and leasing.
Assets that serve a company for longer and cost more don’t go into costs at once. They spread over time through depreciation.
Concepts
A fixed asset has a longer life and higher price, such as a machine or a car. The threshold for tangible assets is set in the Income Tax Act.
A minor asset is cheaper. It goes straight into costs, but it is worth keeping track of.
The acquisition cost is the price including related costs. The residual value is what remains to be depreciated.
Two kinds of depreciation
| Depreciation | What for | Who sets it |
|---|---|---|
| Tax | The income tax base | The law: depreciation groups and rates |
| Accounting | Actual wear in the books | You, with a depreciation plan |
For tax you can depreciate straight-line or accelerated. You pick the method when you put the asset into use, and it then stays fixed for that asset.
Example of straight-line depreciation in group 2 (5 years): 11% in the first year, then 22.25% of the acquisition cost each year. For a machine costing CZK 684,000, that is CZK 75,240 in the first year and CZK 152,190 in each following year.
In DameDoklad
On the asset card, enter the acquisition cost, in-service date and depreciation group. The app prepares a depreciation plan and posts depreciation for the chosen period in one go.
You can also record technical improvements that raise the value, disposal by sale or write-off, and leasing contracts.
In tax records, a paid received invoice whose posting template is a tangible asset account, such as Received invoice – asset acquisition on account 042, is not a tax expense. A machine reaches the tax base only through depreciation (§ 25(1)(a) of the Income Tax Act). An invoice on another template counts as an expense until you link its line to an asset card, and the app then corrects the expense itself. An intangible asset, such as software, is an expense when paid in tax records (§ 24(2)(zn) of the Income Tax Act): its card is not depreciated for tax, and linking it to the invoice corrects nothing.
When a price or a share changes
- A changed entry price for a reason other than a technical improvement, such as registering for VAT or cancelling a registration: depreciation runs from the changed price and the rate stays (§ 29(7) of the Income Tax Act).
- A bigger co-ownership share: a share you buy merges with the one you hold. A share acquired for example by a contribution depreciates only up to the sum of residual prices, with half a year’s depreciation in the year you acquire it (§ 30c(2) and § 26(7)(b)).
- An M1 vehicle with the 2 000 000 Kč limit: the app recomputes the ratio on an improvement or a changed price. An improvement of a vehicle with extraordinary depreciation under § 30a, and other assets on a leased vehicle, run on their own card and share the limit with the vehicle or the instalments.
The asset card and inventory lists print in Czech or English, by the language of the app.
Labels and sets of movable assets
On an asset’s card you can print an inventory label with a Code 128 barcode of the inventory number, and several at once with the Labels button on the list, long-term and small assets alike, on an A4 sheet or a roll. A reader that types the number into search finds the card. Not checked with a physical reader.
A set of movable assets must be recorded separately under § 26(2) of the Czech Income Tax Act, with additions and removals. List the items on the card of a tangible asset; the first is the main functional item, which decides the depreciation group. The list is the record and does not change the card’s price. When an item leaves, record the removal; tax and accounts change with a partial disposal on the card. A physical stocktake gives each part of a set its own line under the card: it is there, or it is missing. A missing part leaves the list once settled, but the price and depreciation of the card do not change.