How do I record building allowances (for example Division 43 capital works allowances and building write-offs) in Simple Invest 360?
Two options are available. A Capital Allowance deduction can be processed by:
1) Posting the capital works deduction through the Depreciation Schedule, or
2) Recording an additional deduction during the Year-End Process;
- Ensure you have recorded your property purchase in Simple Invest 360
- Ensure that the investment sub-account has the correct tax label in the chart of accounts and that account is unitised.
To record the Capital Allowance Deduction from the Depreciation Schedule follow the steps below:
|From the Main Toolbar, go to Compliance.
|Navigate to Period compliance
- Search for the asset by either the Account Code or Name.
- Purchase Date/Opening Cost will be automatically calculated and will include any cost base adjustments if applicable. This field is editable and open for on-screen adjustments.
- Select Capital Works Deduction as the Depreciation Method.
- Select Save.
To post the Capital Works Deduction, select the checkbox next to the asset(s). From the Depreciation Menu click Post Depreciation, input the Depreciation Date and select Post.
* Use Method 2 when you're linking both multiple depreciable assets to a property, as well as a capital works deduction to the same property.
- Add the depreciable assets that you wish to calculate depreciation for. For additional help with this step, please see How to record asset depreciation using Property Worksheet
- Search for the property by either Account Code or Name
- Proceed to fill out the relevant information for the asset that you are claiming the Capital Works Deduction on. Refer to example below, remembering to select Capital Works Deduction as the Depreciation Method.
- Select Add to Registry
- Select Close
To post the Capital Works Deduction along with the Depreciable Assets, select the checkbox next to the asset(s). From the Depreciation Menu click Post Depreciation, input the Depreciation Date and select Post.
Add a Deduction during the Year-End Process.
You can add an item in the Calculate Taxable Income section of the Year-End process. However, this deduction will not be recorded against an asset.
- If you wish to add a deduction via this method while also reducing the CGT cost base of an asset, you will need to complete a CGT Cost Base Adjustment in addition to the process outlined below.
|From the Main Toolbar, go to Compliance.
|Select Period compliance from the list.
Select Start Workflow.
If the Year-End process has already been started, select Calculate Taxable Income
- From the Calculate Taxable Income screen under Less, select + Add Item. Then select the required deduction:
- This creates a new line item. Enter the value for the deduction:
Alternatively, you can link the capital works adjustment to a property by selecting .
Then, select the property account and enter the tax adjustment value:
- Click Save and Post to save these changes.
How to adjust/reverse Capital Works?
1. Recorded through Depreciation Method
If capital works were recorded using the Depreciation Method, then users will need to delete the transaction from System Journal (Note: System Journal is posted by the system automatically).
In order to reverse a System Journal, users need to navigate to Accounting from the Main toolbar and select Transaction List. From Transaction List Screen, tick System Journal on and search for the depreciation journal. Users can use the filter on the right top and type in the keyword to find that particular journal.
Select the journal by ticking on the box and click on Delete. Select Ok to finalise. For more information, also check How to delete a transaction.
Once deleted, users can then update the depreciation amount from the Depreciation screen as described above in this article.
2. Recorded during the Year-End Process.
If capital works were recorded in the Calculate Taxable Income screen, you can simply remove the item in this screen, then select Save and Post:
If a CGT Cost Base Adjustment was also recorded, you will need to locate and delete the transaction that was created to reverse any changes that were made.