DEPRDECL

The DEPRDECL function calculates the depreciation expenses for a series of assets. DEPRDECL uses the declining balance method, as described in "Calculation Method Used by DEPRDECL", to depreciate the assets over the specified lifetime of the assets. The starting value and ending value are specified for the assets acquired in each time period.

Tip:

The pure declining-balance method of depreciation used by DEPRDECL is not the most widely used form of the declining-balance method. For a more commonly used form of the declining-balance method, see the DEPRDECLSW function, which uses a combination of the declining-balance and straight-line methods.

Return Value

DECIMAL

The return value is dimensioned by all the dimensions of start-exp.

Syntax

DEPRDECL(start-exp end-exp n [STATUS] [decline-factor [ {FULL|HALF|portion-exp}[time-dimension] ] ])

Arguments

start-exp

A numeric expression that contains the starting values of the assets. The start-exp expression must be dimensioned by a time dimension. For each value of the time dimension, start-exp contains the initial value of the assets acquired during that time period. In addition to a time dimension, start-exp can also have non-time dimensions.

end-exp

A numeric expression that contains the ending values of the assets. The end-exp expression must be dimensioned by the same dimensions as start-exp. For each value of the time dimension, end-exp contains the final (or salvage) value for the assets acquired during that time period. Each value of start-exp must have a corresponding end-exp value. For example, when the assets acquired in 1996 have a salvage value of $200, then the value of end-exp for 1996 is $200.

n

An INTEGER expression that contains the number of periods for the depreciation life of the assets. The n expression can have any of the non-time dimensions of start-exp, but it cannot have a time dimension.

STATUS

Specifies that DEPRDECL should use the current status list (that is, only the dimension values currently in status in their current status order) when computing the depreciation expenses. By default DEPRDECL uses the default status list.

decline-factor

A numeric expression that gives the declining balance rate to use for calculating the depreciation expenses. The decline-factor expression can have any of the non-time dimensions of start-exp, but it cannot have a time dimension.

A factor of 2 indicates a double declining balance. The default is 2.

FULL

(Default) Specifies that the full amount of a time period's depreciation expense is charged to the time period in which assets were acquired. Charges the full amount to all of the assets in the series.

HALF

Specifies that half of the full amount of a time period's depreciation expense is charged to the time period in which assets were acquired. Charges half the full amount to all of the assets in the series. When you specify HALF as the portion of depreciation expenses to charge to the period of acquisition, the HALF factor is applied to each period. Half of each period's full depreciation is rolled to the next period, and the final half period of depreciation takes place in the time period n + 1. You might want to use HALF when assets are acquired during the second half of the time period.

portion-exp

When you want to charge the full amount for some assets and half the amount for other assets, you can supply a portion-exp expression that is dimensioned by any of the non-time dimensions of start-exp. The portion-exp expression must be a text expression with values of FULL or HALF.

time-dimension

The name of the time dimension by which start-exp and end-exp are dimensioned. When the time dimension has a type of DAY, WEEK, MONTH, QUARTER, or YEAR, the time-dimension argument is optional.

Notes

Calculation Method Used by DEPRDECL

DEPRDECL calculates the depreciation expense for a given time period as the sum of that period's depreciation expenses for all assets in the series that are not yet fully depreciated. The first period of depreciation for an asset is the period in which it was acquired.

For each time period, DEPRDECL calculates the declining balance depreciation expense by multiplying the current value of an asset by the decline-factor and dividing the result by the number of periods in the lifetime of an asset. However, when the calculation for a specific time period results in an asset's current value going below the ending value, then the depreciation expense is adjusted. In this instance, the depreciation expense is calculated as the current value minus the ending value.

Low Ending Value

When the ending value specified for an asset is low enough that the depreciation expense for the last period does not need to be adjusted, then the total depreciation expense over all the periods will usually be less than the starting value minus the specified ending value.

High Ending Value

When the ending value specified for an asset is relatively high, then an asset might be totally depreciated in fewer periods than were specified for the lifetime of the depreciation. In this instance, when you want the depreciation expense applied across the specified lifetime of the depreciation, you can lower the decline-factor.

DEPRDECL and NA Values

When a value of start-exp is NA and the corresponding value of end-exp is not NA, an error occurs. Similarly, when a value of end-exp is NA and the corresponding value of start-exp is not NA, an error occurs.

DEPRDECL is affected by the NASKIP option when a value of start-exp and the corresponding value of end-exp are both NA. When NASKIP is YES (the default), DEPRDECL treats the values as zeros when calculating the depreciation expenses. When NASKIP is NO, DEPRDECL returns NA for all affected time periods.

Examples

Example 13-1 Using DEPRDECL to Calculate Depreciation Expenses for Assets Acquired in a Single Period

This example shows how to use DEPRDECL to calculate depreciation expenses for assets acquired in a single time period.

The following statements create two variables called assets and salvage.

DEFINE assets DECIMAL <year>
DEFINE salvage DECIMAL <year>

Suppose you assign the following values to the variables assets and salvage.

YEAR             ASSETS    SALVAGE
-------------- ---------- ----------
Yr95             1,000.00     100.00
Yr96                 0.00       0.00
Yr97                 0.00       0.00
Yr98                 0.00       0.00
Yr99                 0.00       0.00
Yr00                 0.00       0.00

The assets variable contains the starting value of the assets acquired in 1995. The salvage variable contains the ending value of the assets acquired in 1995.

The following statement reports asset and salvage values, along with depreciation expenses for the assets. Note that the call to DEPRDECL to calculate the depreciation expenses specifies an asset lifetime of 5 periods (in this case, years) and a decline factor of 2 (double-declining balance).

REPORT assets salvage W 12 HEADING 'Depreciation' -
   DEPRDECL(assets salvage 5 2 FULL year)

This statement produces the following output.

YEAR             ASSETS    SALVAGE   Depreciation 
-------------- ---------- ---------- ------------
Yr95             1,000.00     100.00       400.00
Yr96                 0.00       0.00       240.00
Yr97                 0.00       0.00       144.00
Yr98                 0.00       0.00        86.40
Yr99                 0.00       0.00        29.60
Yr00                 0.00       0.00         0.00 

In this example, the depreciation expense for 1999 is adjusted so that the current asset value does not fall below the salvage value. The current asset value is calculated by subtracting the accumulated depreciation expense from the starting asset value. For example, for 1998 the accumulated depreciation expense is $870.40 ($400.00 + $240.00 + $144.00 + $86.40 = $870.40). This means the current asset value for 1998 is $129.60 ($1,000.00 - $870.40 = $129.60). In this example, the depreciation expense is usually calculated by multiplying the current asset value by 2 and then dividing the result by 5. Now, if $129.60 is multiplied by 2, then divided by 5, the resulting depreciation expense is $51.84. If this depreciation expense is subtracted from the 1998 current asset value of $129.60, the current asset value for 1999 would be $77.76, which is below the salvage value of $100. Instead of letting the current asset value fall below the salvage value, the DEPRDECL function subtracts the salvage value ($100.00) from the current asset value ($129.60) to calculate the depreciation expense ($29.60).

Example 13-2 Using DEPRDECL to Calculate the Depreciation Expenses for Assets Acquired in Multiple Periods

You can also use DEPRDECL to calculate the depreciation expenses for a series of assets.

Suppose you change the values for the year 1997 in the variables assets and salvage to the values shown in the following report.

YEAR             ASSETS    SALVAGE
-------------- ---------- ----------
Yr95             1,000.00     100.00
Yr96                 0.00       0.00
Yr97               500.00      50.00
Yr98                 0.00       0.00
Yr99                 0.00       0.00
Yr00                 0.00       0.00
Yr01                 0.00       0.00
Yr02                 0.00       0.00

Now assets and salvage contain nonzero values for 1995 and for 1997

The following statement reports the values of assets and salvage, and uses DEPRDECL to calculate depreciation expenses for each year, specifying an asset lifetime of 5 years, and a decline factor of 2 (double declining balance).

REPORT assets SALVAGE W 12 HEADING 'Depreciation'  - 
   DEPRDECL(assets salvage 5 2 FULL year)

This statement produces the following output. (Notice that the depreciation expense increases in 1997 due to the assets acquired in that year.)

YEAR             ASSETS    SALVAGE   Depreciation 
-------------- ---------- ---------- ------------
Yr95             1,000.00     100.00       400.00
Yr96                 0.00       0.00       240.00
Yr97               500.00      50.00       344.00
Yr98                 0.00       0.00       206.00
Yr99                 0.00       0.00       101.00
Yr00                 0.00       0.00        43.20
Yr01                 0.00       0.00        14.80
Yr02                 0.00       0.00         0.00