Part 2: Preparing A Financial Plan

Example: If an asset such as a vehicle costs $25,000 and has a useful life of 5 years and a scrap or salvage value of $5,000, the yearly depreciation amount would be $4,000.

Type of assets	Asset cost	Scrap or salvage value	Asset cost depreciation	Estimated useful life in years	Yearly depreciation amount
Example	$25,000	($5,000)	$20,000	5 years	$4,000
Building
Equipment
Vehicle
Leaseholds
Furniture
Other
Total Yearly Depreciation Amount

2) Declining method (Capital Cost Allowance)

The declining method of capital cost allowance (CCA) is Revenue Canada's equivalent to depreciation. Revenu Canada establishes a set of precentages for different groups of assets. For tax purposes, only use one half the CCA rate in the first year of owning the assets.

Example: The CCA allowance for an automotive vehicle is currently 30% a year. Multiply the maximum rate allowed (30%) by the un-depreciated balance. Using the $25,000 vehicle example, calculate the capital cost allowance as follows:

Year	Value at beginning of year	CCA rate	CCA yearly amount	Value at end of year
1	$25,000	30%	$7,500	$17,500
2	$17,500	30%	$5,250	$12,250
3	$12,250	30%	$3,675	$8,575

Use the CCA method to calculate your assets in the tables below.

Year 1
Type of asset	Value at beginning of year	CCA rate %	CCA yearly amount	Value at end of year
Building
Equipment
Vehicle
Leasehold
Furniture
Total Year 1 Depreciation Amount				$

Year 2
Type of asset	Value at beginning of year	CCA rate %	CCA yearly amount	Value at end of year
Building
Equipment
Vehicle
Leasehold
Furniture
Total Year 2 Depreciation Amount				$

Year 3
Type of asset	Value at beginning of year	CCA rate %	CCA yearly amount	Value at end of year
Building
Equipment
Vehicle
Leasehold
Furniture
Total Year 3 Depreciation Amount				$

Other income

Provide a detailed breakdown of other income and identify the source, such as SBA operating assitance, business support, and other assistance.


Tax rate

Income tax rates: Arbitrarily set a low rate of 25% on net income below $200,000 and a high rate of 50% on net operating income above $200,000. Rates can vary by state and province and within individual businesses as well. Consult your accountant.


Continue to projected income statement template

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