S2k Depreciation
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From: Calgary, Alberta, Canada
Originally Posted by black2000,Aug 6 2008, 09:09 PM
On a balance sheet
assets put money into your bank account
liabilities remove money from your bank account
your s2000 is the lenders asset (it puts money in their account)
your s2000 is your liability (it takes money out of your bank account)
You have never earned a dime of profit off your s2000, it has only caused you expenditure (unless you use it for the taxi service you own, in which case it is a depreciating asset and you get a tax credit for the depreciation of a business asset)
Your s2000 is a liability. and it is depreciating.
assets put money into your bank account
liabilities remove money from your bank account
your s2000 is the lenders asset (it puts money in their account)
your s2000 is your liability (it takes money out of your bank account)
You have never earned a dime of profit off your s2000, it has only caused you expenditure (unless you use it for the taxi service you own, in which case it is a depreciating asset and you get a tax credit for the depreciation of a business asset)
Your s2000 is a liability. and it is depreciating.
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From: Wylie, TX
Originally Posted by black2000,Aug 6 2008, 09:09 PM
your s2000 is the lenders asset (it puts money in their account)
your s2000 is your liability (it takes money out of your bank account)
<snip>
Your s2000 is a liability. and it is depreciating.
your s2000 is your liability (it takes money out of your bank account)
<snip>
Your s2000 is a liability. and it is depreciating.
The loan on your S2000 is the lender's asset.
The loan on your S2000 is your liability.
The S2000 is your asset, unless you default on the loan, then...
The S2000 becomes the lender's asset (since it was collateral for the loan).
If you want to sell the S2000 before you pay off the loan, you have every right to do so. Then you use part of the proceeds from that sale to fulfill your obligations (liability) to the lender for the S2000 loan, and the rest of the proceeds to put in your pocket. If you're "underwater" on the loan, you still have a liability for the remaining portion of the loan (that wasn't covered by the sale of the S2000) even though you no longer have the S2000 as an asset.
Seriously. WTF? I studied Computer Science, and I still get the basic gist of assets, liabilities, credits and debits. What the hell are the rest of you guys talking about?
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From: Wylie, TX
Originally Posted by 3ngin33r1,Aug 6 2008, 06:58 PM
If an asset is something of value owned, how can one be an asset to a company? The company can't own you.
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From: Washington DC
The S is generally referred to as an asset. It is a PPE asset. If you sold the car, you would receive residual salvage value. T accounts, debit = credit. Accounts payable and equipment asset.
While everyday life is such that we can interchange words (decimate vs eliminate, anyone?), there is a generally accepted standard of application for asset and liability in the financial sense.
Of course, you can argue you choose to categorize things differently because of your methods, and you can argue that. If the S is seen as a risk (chance of hitting people, destroying crap), then yes you could argue liability. But that's generally rare.
A worker is an asset to the company because they provide skills to my company. I paid for the worker. He provides a skill or service that gets me accounts and money. I don't own him, but I own his skill set. If he discovers something and patents it with knowledge from work, yes the patent is mine.
While everyday life is such that we can interchange words (decimate vs eliminate, anyone?), there is a generally accepted standard of application for asset and liability in the financial sense.
Of course, you can argue you choose to categorize things differently because of your methods, and you can argue that. If the S is seen as a risk (chance of hitting people, destroying crap), then yes you could argue liability. But that's generally rare.
A worker is an asset to the company because they provide skills to my company. I paid for the worker. He provides a skill or service that gets me accounts and money. I don't own him, but I own his skill set. If he discovers something and patents it with knowledge from work, yes the patent is mine.
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From: Wylie, TX
Originally Posted by Apollo,Aug 6 2008, 10:48 PM
If you sold the car, you would receive the amount of money that the buyer agrees to pay.
Salvage value is generally defined as the value of the vehicle at the end of its useful life (i.e., when it heads to the scrapyard). Not necessarily the value of the vehicle on the day you decide to sell it.
Residual value generally has more to do with lease terms (i.e., the residual value for a vehicle at the end of a 36 month lease is some pre-determined amount based on some percentage of the original vehicle's value or sale price).
If you sell a car (in a free market), you're going to receive the amount of money that the buyer is willing to pay, which is likely not related to either of the values above.
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From: Arlington, VA
Nice accounting lesson. I have to agree with mxt Marcus. The two Marcuses are going at it! In any event, I love my S and plan to continue driving the h-ll out of it, regardless of whether it's a liability or an asset. 
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Originally Posted by black2000,Aug 6 2008, 07:09 PM
On a balance sheet
assets put money into your bank account
liabilities remove money from your bank account
your s2000 is the lenders asset (it puts money in their account)
your s2000 is your liability (it takes money out of your bank account)
You have never earned a dime of profit off your s2000, it has only caused you expenditure (unless you use it for the taxi service you own, in which case it is a depreciating asset and you get a tax credit for the depreciation of a business asset)
Your s2000 is a liability. and it is depreciating.
assets put money into your bank account
liabilities remove money from your bank account
your s2000 is the lenders asset (it puts money in their account)
your s2000 is your liability (it takes money out of your bank account)
You have never earned a dime of profit off your s2000, it has only caused you expenditure (unless you use it for the taxi service you own, in which case it is a depreciating asset and you get a tax credit for the depreciation of a business asset)
Your s2000 is a liability. and it is depreciating.
Assuming you have a loan or lease.....
The S2000 is your asset securing the banks money.
The lease or loan is the liability on your balance sheet. Your obligation is to repay the cash you borrowed not give your bank your car. Believe me, they don't want your car.
For those with significant equity, i.e. market value exceeds what you owe, the net value of the asset to you is market value less what you owe a lender.
If you have no lien on the vehicle, your asset value = maket value of the vehicle.
I assume you are viewing it from the perspective of someone who is upside down on his/her loan. You apparently invested nothing up front or are amortizing the load over 7 years and have negative equity in the asset. In your case, your liability exceeds the value of your asset meaning you need to contribute additional equity. Your cash.
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From: Kingston, WA
Originally Posted by mxt_77,Aug 6 2008, 09:31 PM
With your basic understanding of things and your poor attempts to redirect the conversation to something totally unrelated to the topic at hand, I'm pretty sure you're not an asset to your company.
