Hi
I think this may be a case of my lack of detailed understanding of depreciation and capital costs….In the profitability section in the actuals tab, why does the net profit not change in line with capital costs? Also, why does depreciation reduce net profit (and not increase it) when (in my case) it changes my negatively geared property into a positive cashflow property after tax?
Another question, I have two properties in Oz and one in NZ, due to the difference in exchange rate and “ID” not supporting multi currency is there any other way than to manually convert all NZD figures before entering them. Otherwise the Kiwi dollar is inflated by about 9% at todays rates and I look wealthier than I am!!!
I assume the closing costs should be cleared when entering year 2, year 3 etc. I assume “ID” is not smart enough to ignore these figures for subsequent years?
Yes another question, can I amend figures for years I have rolled over? Or do I need to delete the particular year and re-enter?
Last questions for now… does it affect the calculations if I don’t enter a per annum capital appreciation rate? And… if I only know the appreciation from purchase to current day, should I enter this in the any period or divide it by the number of years I have had the property and split it accordingly.
Sorry for all the questions, hopefully my questions will answer other peoples yet to be asked queries.
Cheers and thanks in advance
RudyHi Rudy
In this case depreciation is viewed as a cost, your property is worth less due to depreciation.
I have in mind for a future release multiple profolios where each portfolio can be setup individually, until then, you will have to convert the figures.
When you do a rollover of your figures, you can optionally have the rollover manager clear the budget and/or actuals figures for you.
The figures for a rollover would have to be re-entered, they cannot be edited, but this sounds like a good addition to my list of modifications so I will look at implementing this in the future.
To be accurate, you would have to figure out the appreciation rate for each year as closely as you can.
Ask as many questions as you like, it usually gives me ideas on how to improve ID, thanks for putting the time into asking them.
Regards
Philip Batey
JATPAC DesignsAuthor of Investment Detective
Hi
Thanks for your response.
Regarding the depreciation being a cost, I understand your comment, I am just curious as to what other people think on this… the value of the property is less on paper but in reality it is not and this depreciation is a good thing as it is an additional tax deduction – and as mentioned in my case this is helping to turn a negative geared property cashflow positive after tax.
Comments anyone???
Also, I noticed that the word purchase is spelt incorrectly on the 11 second calculator (the 2nd purchase on the right hand side).
Cheers
RickHi
Thanks for spelling mistake.
On the deprectiation, you will notice it does not change the net cash flow but the net profit. To see the effect of the tax refund, enter a weekly figure into the other income field under weekly cash receipts.
Now your property should be positive again and you can see the erroding effect of the depreciation on the overall profit.
Hope this helps
Regards
Philip Batey
JATPAC DesignsAuthor of Investment Detective
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