I have received a depreciation report on a IP we just settled.
I have no understanding on how depreciation works and am seeking some answers.
I would like to calculate our cashflow position on this property - and do so I need to know where depreciation fits in.
The report has 2 different values - Diminishing value & Prime cost.
Am I correct in presuming that I decide on which one I use?
What should I be considering in deciding which method?
Where does depreciation fit in when calculating cashflow?
Cost = $20,785 P/A
Income = $18,720 P/A
Depreciation = $7,373 Diminishing value or $5,892 Prime Cost (30/09/09 to 30/06/10)
Thanks
I have no understanding on how depreciation works and am seeking some answers.
I would like to calculate our cashflow position on this property - and do so I need to know where depreciation fits in.
The report has 2 different values - Diminishing value & Prime cost.
Am I correct in presuming that I decide on which one I use?
What should I be considering in deciding which method?
Where does depreciation fit in when calculating cashflow?
Cost = $20,785 P/A
Income = $18,720 P/A
Depreciation = $7,373 Diminishing value or $5,892 Prime Cost (30/09/09 to 30/06/10)
Thanks