You have to decide how you want to depreciate it. First you need to decide how many years useful life the asset will have and what is its likely residual value at the end of that time (which may be zero). The difference between these two figures is the total amount you need to depreciate over the course of that useful lifetime, and you then have to decide how to divide that amount between the various years.
For your example I’ll assume purchase price £250, useful life 5 years (which is probably an over-estimate), residual value nil.
The two most common approaches are:
- Straight line - where you simply assign an equal amount to each year - in this case you would depreciate £50 in the first year, another £50 in the second year, etc. until it’s completely written off in year 5.
- “reducing balance” - where you fix a percentage of the remaining value to depreciate each year - you might depreciate £125 in year 1 (50% of £250), then £62.50 in year 2 (50% of the remaining £125) etc, and write off the whole remaining balance in year 5.
My gut feeling is that the second option is more appropriate for things like computers, but I’m not an accountant. In fact if you’re only talking £250 your accountant might just say skip the balance sheet altogether and just charge the whole thing to P&L in one year, it depends on your business as to whether this amount is significant in the grand scheme.