Depreciation:

Depreciation allows for the wear and tear on a fixed asset and must be deducted from your income.

You must claim depreciation on fixed assets used in your business that have a useful lifespan of more than 12 months. Not all fixed assets can be depreciated. Land is a common example of a fixed asset that cannot be depreciated.

In most circumstances you can choose between the diminishing value and straight line methods of calculating depreciation.

You do not have to use the same depreciation method for all your assets, but you must use whatever method you choose for an asset for the full year.

The IRD's depreciation rate finder is a quick way to find the rate for assets in the 1996 income year or later.

IRD provides a depreciation calculator to help you work out the amount to claim as a deduction on a business asset.