Technology goods with IRD's depreciation.

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Forums › Finance and wealth management › Technology goods with IRD's depreciation.

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RUKI

1402 posts

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#1667430 10-Nov-2016 15:13

nunz:

...

My phones get bent, bumped, scraped and dropped - physical job on a physical site. They are covered in dust, hit with heat, sweated on and used extensively more than a consumer device. Having a phone fail early is almost a given for me - they dont make hardened standards for phones - both consumer and business phones are the same.

Laptops the same .....

Not the same. There are specially designed robust Telco tools (phones/tablets) for the field technitians. Normally not available over the counter from Spark or Vodo.

FYI: same with Automotive industry - you can use just a laptop or you can buy "special" laptop (at a price of 2-3 laptops :-))

nunz

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#1667439 10-Nov-2016 15:21

RUKI:

nunz:

...

My phones get bent, bumped, scraped and dropped - physical job on a physical site. They are covered in dust, hit with heat, sweated on and used extensively more than a consumer device. Having a phone fail early is almost a given for me - they dont make hardened standards for phones - both consumer and business phones are the same.

Laptops the same .....

Not the same. There are specially designed robust Telco tools (phones/tablets) for the field technitians. Normally not available over the counter from Spark or Vodo.

FYI: same with Automotive industry - you can use just a laptop or you can buy "special" laptop (at a price of 2-3 laptops :-))

But who would spend 3k on a galaxy or ios or android device?

also I had one of those 6k laptop things - it broke nad the support was crud. 3 months - no laptop.

antoniosk

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#1667502 10-Nov-2016 16:09

rayonline:

I was thinking about straight line depreciation for simplicity. I primarily wasn't planning about disposing before the 3yrs (3rys as written by the IRD).

Let's make it brand new. If it is <$500 ex. GST. You can just expense it but you ought to use it for 3yr right? Surely you cannot just get a ~$550 including GST smartphone every year or every 6 months. That would get picked up from an audit a new phone each year?!

It does depend on what you do, how equipment is being used, what costs you're willing to accept in your business and what is actually happening.

If you go through 10 phones a year as a 1-man band and your line of work is not typical of one needing so many phones, it would look suspect and if you were investigated you'd have to explain why the turnover.

In practise buying phones is a cost to your business, and money spent there is money not available for other things (salaries, overheads, advertising etc). It's your business to run, with the fundamental intent of making profits. That's how it works.

I understand tradies (having spoken to quite a few now) burn out their tools at a regular pace and are constantly replacing them (nail guns etc). I've been told it's not uncommon to get a set for each house build (depending on complexity), but then I've also spoken to others who buy top notch stuff that lasts 3 years. Each to their own.

At O2, T-Mobile, TelstraClear and Vodafone we were forever fighting with phone replacement. Across an org, 1000 replacement phones every 6-12 months is a MAJOR cost, and they are NEVER free. Someone has to pay for them :-)

________

Antoniosk

sleemanj

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#1667572 10-Nov-2016 18:06

antoniosk:
Regarding 2nd hand kit, usually (but not always) there isn't GST on it
Boring I know... btw I'm not an accountant!

Just as well you are not an accountant! 2nd hand goods are deemed by IRD to include GST regardless if the seller is registered or not, the registered buyer is entitled to claim the GST component as if the seller was registered, provided the keep relevant records of what they bought, how much, who from, when and where they got it. You can only claim after payment for the goods (regardless if you are on accrual basis gst)

http://www.ird.govt.nz/gst/additional-calcs/calc-spec-supplies/calc-special/special-supplies-r-v.html

---
James Sleeman
I sell lots of stuff for electronic enthusiasts...

Hammerer

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#1667631 10-Nov-2016 21:06

nunz:

Laptops the same - I bought an Acer Ferrari, back when it was one of the fastest laptops on the planet ( available to consumer). I killed it within 9 months. Running long data sets calculations - taking 3 days or so - really messes with how long a laptop lasts. why didn't I use a desktop? Wasn't allowed / suitable in the situation I was in. 5-6k laptop - gone in 9 months. Phones similar - lots of GPS, Wireless tracking, WarDriving, calculations, encryption stuff. it gets hot a lot.

nunz:

also I had one of those 6k laptop things - it broke nad the support was crud. 3 months - no laptop.

Price does not determine quality. You might have paid 6k to have a computer that pushes the technology beyond reliability. Acer Ferrari's are a case in point. The range was notebooks and netbooks. They were usually ultraportables. They didn't make workhorse laptops or high quality workstations which is what you need for serious number-crunching and continuous processing. So I'm not surprised that they failed. They would not be made to run flat out 24x7 and, I imagine, ran at too high a temperature. By reputation they tended to underperform, indicating bad design, and were temperamental and unreliable product, again indicating bad desin. Oh, ... just like automobiles branded Ferrari.

If a tech product fails inside 3 years, it more often than not means that the purchase did not meet the requirements or the product has been mistreated, or both. It's not uncommon for people to buy a cheap laptop with a plastic frame that flexes a lot and then carry that laptop all over the place. The lack of a rigid frame will increase the likelihood of components being placed under stress and strain.

You decide the level of support that you want. If you really need your computer then get a contract that provides a replacement while it is being repaired. Acer, for example, is generally not considered to have high-end support.

antoniosk

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#1667635 10-Nov-2016 21:15

sleemanj:
antoniosk:
Regarding 2nd hand kit, usually (but not always) there isn't GST on it
Boring I know... btw I'm not an accountant!

Just as well you are not an accountant! 2nd hand goods are deemed by IRD to include GST regardless if the seller is registered or not, the registered buyer is entitled to claim the GST component as if the seller was registered, provided the keep relevant records of what they bought, how much, who from, when and where they got it. You can only claim after payment for the goods (regardless if you are on accrual basis gst)

http://www.ird.govt.nz/gst/additional-calcs/calc-spec-supplies/calc-special/special-supplies-r-v.html

Awesome stuff, there you go!

________

Antoniosk

nunz

1421 posts

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#1668136 11-Nov-2016 15:59

Hammerer:

nunz:

Laptops the same - I bought an Acer Ferrari, back when it was one of the fastest laptops on the planet ( available to consumer). I killed it within 9 months. Running long data sets calculations - taking 3 days or so - really messes with how long a laptop lasts. why didn't I use a desktop? Wasn't allowed / suitable in the situation I was in. 5-6k laptop - gone in 9 months. Phones similar - lots of GPS, Wireless tracking, WarDriving, calculations, encryption stuff. it gets hot a lot.

nunz:

also I had one of those 6k laptop things - it broke nad the support was crud. 3 months - no laptop.

Price does not determine quality. You might have paid 6k to have a computer that pushes the technology beyond reliability. Acer Ferrari's are a case in point. The range was notebooks and netbooks. They were usually ultraportables. They didn't make workhorse laptops or high quality workstations which is what you need for serious number-crunching and continuous processing. So I'm not surprised that they failed. They would not be made to run flat out 24x7 and, I imagine, ran at too high a temperature. By reputation they tended to underperform, indicating bad design, and were temperamental and unreliable product, again indicating bad desin. Oh, ... just like automobiles branded Ferrari.

If a tech product fails inside 3 years, it more often than not means that the purchase did not meet the requirements or the product has been mistreated, or both. It's not uncommon for people to buy a cheap laptop with a plastic frame that flexes a lot and then carry that laptop all over the place. The lack of a rigid frame will increase the likelihood of components being placed under stress and strain.

You decide the level of support that you want. If you really need your computer then get a contract that provides a replacement while it is being repaired. Acer, for example, is generally not considered to have high-end support.

Acers support has been sub-optimal everytime we have had to deal with them. this was one of the earlier ferraris before Acer got seriously into cheaper stuff. It had an AMD CPU and Nvidia(?) 512MB Graphics card - Back when 64MB was a std graphics card.

The nearest to it was a Toshiba - they were consitently called the fastest commercial laptop for sale by a range of reviewers.

My issues was I couldn't use a desktop in the situation I was in and the laptop had 2 - 6x the CPU power, 4 x the memory and a faster hard drive to compute on than the desktop provided for a job with a timeframe 25-50% of the stated time we advised it would take to complete the job. typical last minute we need it now to meet a deadline and left it to the last minute type job. Add to that the fact they wouldn't give direct access to the servers the data was on sowe couldn't kill indexing while updating 40 million plus rows x multiple databases and locating the data on my laptop, running it local an replicating the data back to the server got the job done. Onsite rules said no external desktops allowed and hadn't gotten around to banning laptop s as very few people actually used or had them. Laptop uptake only really got serious 8 years ago - when it trendily was pushed to replace te desktop.

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Kyanar

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#1670467 14-Nov-2016 09:45

Geektastic:

So you can cover your time as an unpaid tax collector for the IRD...! ;-)

Unpaid? You obviously aren't holding the GST in an interest bearing account...

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