Depreciation Calculator Nigeria — Straight-Line & Reducing Balance
Calculate asset depreciation schedules using straight-line or reducing balance methods. Essential for Nigerian business accounting and tax planning.
₦
₦
years
Common assets:
₦0
Annual Depreciation (SL)
₦0
Total Depreciable Amount
0%
Straight-Line Rate
₦0
Year 1 Dep. (Reducing Balance)
Depreciation Schedule
Frequently Asked Questions
What is depreciation and why does it matter in Nigeria?
Depreciation is the reduction in the book value of a fixed asset over time due to wear and tear. In Nigeria, the FIRS allows businesses to deduct depreciation (called Capital Allowances under CITA) as a business expense, reducing taxable income. Proper depreciation tracking is essential for accurate financial statements and tax compliance.
What are the FIRS capital allowance rates in Nigeria?
Under the Companies Income Tax Act (CITA), capital allowances (not accounting depreciation) are allowed at: Industrial buildings — 10% initial, 2.5% annual; Non-industrial buildings — 5% annual; Plant & machinery — 50% initial + 25% annual; Motor vehicles — 50% initial + 25% annual; Office furniture — 25% annual. Note these differ from accounting depreciation rates.
What is the difference between straight-line and reducing balance depreciation?
Straight-line depreciation deducts an equal amount every year. Reducing balance (declining balance) deducts a fixed percentage of the remaining book value each year, resulting in higher charges in early years and lower charges later. Most Nigerian assets depreciate faster when new, making reducing balance more realistic.
What useful life should I assign to common Nigerian business assets?
Common useful lives: Generator (5–10 years), vehicles (5 years), computers (3–4 years), furniture (5–10 years), buildings (20–50 years), air conditioners (7–10 years), factory machinery (10–20 years). These can be adjusted based on actual usage in Nigerian conditions (heat, dust, power surges).