Setting Up Capital Cost Allowance

Capital Cost Allowance (CCA) is a tax deduction for businesses to claim depreciation of capital assets.

When you purchase a capital asset, you can’t deduct its entire cost from your income tax that fiscal year. Instead, you can deduct a portion of the expense from your income tax each year as the value of the capital asset depreciates.

Depreciable assets are grouped into classes with different depreciation rates. The most common classes can be found by clicking HERE.

To set up your business’s CCA classes and rates, go to Setup > CCA/Depreciation.  The CCA/Depreciation dialogue box will open. You can work with your CCA classes based on the information on your screen.

The main screen lists the available classes for your CCA schedule.  There is also a second tab for Class 10.1 assets.  Class 10.1 assets are subject to special rules, and are not pooled, so they are listed on a separate screen.

The Beginning Balance in this screen is what we call the Opening Undepreciated Capital Cost (UCC ). This number can be found on your prior year’s tax return, in the column for the closing UCC.  Your closing UCC will roll over in the next year to become your opening UCC.

It is important to note that in AgExpert, these balances do NOT carry over automatically.  Each year, you must go to Setup > CCA/Depreciation and edit each class to enter it’s beginning balance, based on your prior year tax return.  All depreciation calculations within AgExpert are for information only and do not post automatically when you move into the next fiscal year. You also must manually enter your CCA claim as a journal entry at the end of each fiscal year.

If you need to add, delete or edit any class, you can do so using the buttons at the bottom of the screen.

Last updated on April 5, 2016 by FCC AgExpert