Illustrated example of how to calculate annual depreciation charge.

A company purchased a property with an overall cost of Tshs 100m on 1 April 2009. The property elements are made up as follows:
Tshs 000
Estimated life
Land and
buildings
(Land
element Tshs 20,000)
65,000
50 years
Fixtures
and fittings
24,000
10 years
Lifts
11,000
20 years
  • Calculate the annual depreciation
  • charge for the property for the year ended 31 March 2010. 
Solution
Tshs 000
Land and
buildings (65,000 – 20,000)/50 years))
900
Fixtures
and fittings (24,000/10 years)
2,400
Lifts
(11,000/20 years)
550
Total property
depreciation
3,850

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