You can only claim depreciation for the vehicle up to a certain limit. The excess is non-depreciated.
For example, if a car was purchased for $60,000 in 2020 financial year, then
- depreciation can be claimed up to the 2020 threshold of $57,581 (see below) for the duration of ownership.
- gst credit claimed on this car purchase will be $57,581 ÷ 11 = $5,234.64
- On the balance sheet, it will appear as
Motor vehicle non-depr cost $2,419
Motor vehicle depr cost $57,581
TOTAL MV cost $60,000
- As a journal entry, it will be
DR Motor vehicle non-depr cost $2,419
DR Motor vehicle depr cost $57,581
CR Bank/loan $60,000