A Depreciation Schedule is a document that outlines how an asset loses value over time for tax and accounting purposes. It is commonly used when financing Equipment Finance, Vehicle Finance, and Business Loans. The schedule helps determine tax deductions, the asset’s book value, and its residual value during loan assessments. Related terms: Depreciating Asset, Useful Life, Instant Asset Write-Off. Relevant hubs: Business Owners Finance Hub.

If you’re considering how depreciation affects real-world purchases, see how equipment write-offs work in our guide to ATO asset write-off rules for medical clinics and how low-doc structures can support upgrades in low doc equipment finance.

Why a Depreciation Schedule Matters

Lenders and accountants use depreciation schedules to understand asset value, estimate tax deductions, and determine whether an asset is suitable for finance.

• Determines annual tax deductions
• Shows the asset’s declining value over time
• Helps lenders assess residual value and security strength
• Used for accurate financial reporting
• Essential for planning replacement cycles for equipment and vehicles

How a Depreciation Schedule Works

• Lists the asset’s purchase price and start date
• Includes the depreciation method (prime cost or diminishing value)
• Shows annual deductions over the asset’s useful life
• Records the written-down value each year
• Helps forecast when an asset should be replaced or refinanced

Depreciation schedules are commonly requested when assessing Working Capital Loans and Invoice Finance for businesses with large equipment fleets, alongside specialist asset reviews in working capital loan strategies.

Official reference: ato.gov.au