How Xero calculates pool depreciation
Xero calculates pool depreciation on all assets in the pool as if they were a single asset. The value of the pool is adjusted for assets added or transferred to the pool during the year, and for any pool adjustments in the year. Xero uses the diminishing value depreciation method for pool depreciation.
The depreciable value of an asset in a pool is the pooled amount you enter when you register the asset, or transfer it into the pool.
If you select the Small Business Pool or Low Value Pool, Xero applies default depreciation rates set by the ATO:
- Small Business Pool - Full rate 30.00%, half rate 15.00%
- Low Value Pool - Full rate 37.50%, half rate 18.75%
If you set up a custom pool, you can set your own depreciation rate.
Pool balance before depreciation
Xero calculates the pool balance before depreciation as follows:
Opening balance + transferred assets + new assets - disposals + adjustments
Xero calculates the year's pool depreciation when depreciation is run for the last month of the financial year.
|Amount to be depreciated||Depreciation rate|
|Pool opening balance||Full rate|
New assets added to pool
Adjustment for current year addition
Existing registered assets transferred to pool
Adjustment for opening balance or business use