You're thinking like a consumer rather than a businessman, Brad. Assets are not expenses. bottom line.
Nah, I'm thinking like a guy who actually writes a check for his expenses rather than running them around on paper to satisfy the IRS or make the annual reports look good for the shareholders.
I assign the vehicle market value completely seperate from day-to-day expense. The saleable value is the saleable value, no matter how much I have or haven't "depreciated" it. I'm not going to try and assign any creative bookeeping to it just to say I can.
Expense is expense. You either paid (or will pay) for something or you don't. Pretty simple. No fancy monetary footwork need be involved, at least not in my situation. Depreciation may be great for spreading out costs on paper, but it still costs me X number of dollars per year to pay for, repair, maintain, and fuel my vehicle. Hard cost. Out of pocket. That's how I calculate "expense" in my ledger.
Revenue less expense = net income/loss. Residual value of asset less amount owed = net equity. Pretty simple. And I don't need an accountant to tell me how to calculate or read it. I know exactly where I stand financially, in hard, cold numbers. Not where I
might stand, or where the IRS thinks I stand, or whatever. Where I actually stand. Right now. Right here. Today.
I am not an accounting dunce. I've been in corporate America for more than two decades. I'm fully aware of corporate accounting practices, how they function, and what they are for. I also know it's financial maneuvering mostly to defer/lower taxes, or to make the shareholders happier by spreading expenses across as much paper as possible. And it's a bunch of overly complex crap. It keeps most people so confused they don't know which end is up, or they end up making stupid decisions because it looked good on paper but bankrupt them in real life. I choose to not fall into that trap.
Brad