16 Understand Standard Depreciation Methods

You assign depreciation methods to an asset when you create a master record. The system performs depreciation calculations based on the established depreciation rules for each standard depreciation method.

This chapter contains these topics:

Section 16.1, "About Standard Depreciation Methods,"
Section 16.2, "Method 00 - Null Depreciation,"
Section 16.3, "Method 01 - Straight Line,"
Section 16.4, "Method 02 - Sum of the Year's Digits,"
Section 16.5, "Methods 03, 04, and 05 - Declining Balance to Cross-Over,"
Section 16.6, "Method 06 - Fixed Percent on Declining Balance,"
Section 16.7, "Method 07 - ACRS Standard,"
Section 16.8, "Method 08 - ACRS Optional,"
Section 16.9, "Method 09 - Units of Production,"
Section 16.10, "Method 10 - MACRS Luxury Cars - Domestic,"
Section 16.11, "Method 11 - Fixed Percent Luxury Cars - Foreign,"
Section 16.12, "Method 12 - MACRS Standard,"
Section 16.13, "Method 13 - MACRS Alternative,"
Section 16.14, "Method 14 - ACRS Alternate Real Property,"
Section 16.15, "Method 15 - Fixed Percent of Cost,"
Section 16.16, "Method 16 - Fixed Percent on Declining Balance to Cross-Over,"
Section 16.17, "Method 17 - AMT Luxury Autos,"
Section 16.18, "Method 18 - ACE Luxury Autos."

16.1 About Standard Depreciation Methods

The following rules apply to the predefined depreciation methods included in the Fixed Assets system:

The system does not allow accumulated depreciation to exceed the depreciable basis. The depreciable basis for an asset is the asset's original cost minus its salvage value. When the total of an asset's current depreciation and accumulated depreciation is greater than the depreciable basis, the system calculates current depreciation by subtracting the accumulated depreciation from the depreciable basis.
The system calculates a full period's depreciation for the initial period that you acquire an asset. If you do not calculate depreciation for the month you dispose of an asset, you should run the disposal before you run the depreciation. Exceptions to this rule are the mid-month, mid-quarter, and mid-year conventions.

16.1.1 Standard Depreciation Calculation - Process Flow

The system calculates depreciation for the asset cost based on the standard depreciation method that you assign to an asset.

Figure 16-1 Standard Depreciation Calculation - Process Flow

Description of "Figure 16-1 Standard Depreciation Calculation - Process Flow"

16.1.2 What You Should Know About

Topic	Description
Life months	Life months are not required for predefined depreciation methods 06, 09, 11, and 15. If you enter life months for any of these methods, it is informational only. The system depreciates assets you assign these methods until the cost is fully depreciated or you dispose of them. Life months are required for all user defined depreciation methods.
Depreciating an asset after disposal	When you dispose of an asset, the disposal program zeros out the cost and accumulated depreciation amounts for the asset. When the depreciation method uses a mid-year convention for the asset's depreciation and the asset is not fully depreciated at the time of disposal, the depreciation program cannot calculate the final depreciation amount (cost and accumulated depreciation amounts both being zero as a result of the disposal program). To depreciate an asset after disposal, you must put a disposal date in the asset master record, compute depreciation, remove the date from the master record, and finally, run the disposal program to actually dispose of the asset.
Short years	A short year is a year where the normal number of periods is greater than the number of period ending dates set up in the Company Fiscal Date table (F0008). Use remaining life (R) for all the assets that your organization acquires before or during a short year. For example, if the first year for the depreciation of an asset is a short year, use the remaining life (R) method of computation.
Depreciation methods that use the mid-year convention (Y)	The system begins depreciation calculations for all methods that use the mid-year convention at the mid-point of a regular tax year. For example, if you place an asset in service in April for a calendar year and assign MACRS depreciation with the mid-year convention, the system only calculates depreciation for one-half year beginning in July.

16.2 Method 00 - Null Depreciation

No depreciation is calculated.

16.3 Method 01 - Straight Line

The system depreciates the asset's cost (less salvage value) in equal amounts over the estimated useful life (life periods) of the asset.

When you use the straight line depreciation method, you can designate a mid-month, mid-quarter, or mid-year averaging convention. If you do not designate a convention, the system depreciates the full month for the period you place the asset in service.

When you use straight line depreciation, you must indicate one of the following computation methods:

Computation Method	Description
Inception-to-date (I)	((Cost - Salvage Value) / life months) * elapsed months) - accumulated depreciation = period depreciation. For example, depreciation for January 1998 would be calculated as follows: (( 100,000.00 - 0) / 60) * 6) - 8,333.00 = 1,667.00
Remaining life (R)	(((Net book value - salvage) / Remaining life periods) * months elapsed year-to-date) - year-to-date depreciation = period depreciation. For example, depreciation for January 1998 would be calculated as follows: ((( 91,667.00 - 0) / 55) * 1) - 0 = 1,667.00 The following rules apply to this calculation: § The cost less prior years' accumulated depreciation equals the net book value (NBV). § If the NBV less salvage value is greater than zero, it is divided by the remaining life months as of the beginning of the current fiscal year. § Net Book Value is calculated at the beginning of each fiscal year by netting the cost amount and the cumulative prior years balance for accumulated depreciation.
Current period (P)	Adjusted cost / life months = period depreciation. For example, depreciation for January 1998 would be calculated as follows: (100,000.00 - 0) / 60 = 1,667.00

Computation Method

Description

Inception-to-date (I)

((Cost - Salvage Value) / life months) * elapsed months) - accumulated depreciation = period depreciation.

For example, depreciation for January 1998 would be calculated as follows:

(( 100,000.00 - 0) / 60) * 6) - 8,333.00 = 1,667.00

Remaining life (R)

(((Net book value - salvage) / Remaining life periods) * months elapsed year-to-date) - year-to-date depreciation = period depreciation.

For example, depreciation for January 1998 would be calculated as follows:

((( 91,667.00 - 0) / 55) * 1) - 0 = 1,667.00

The following rules apply to this calculation:

§ The cost less prior years' accumulated depreciation equals the net book value (NBV).
§ If the NBV less salvage value is greater than zero, it is divided by the remaining life months as of the beginning of the current fiscal year.
§ Net Book Value is calculated at the beginning of each fiscal year by netting the cost amount and the cumulative prior years balance for accumulated depreciation.

Current period (P)

Adjusted cost / life months = period depreciation.

For example, depreciation for January 1998 would be calculated as follows:

(100,000.00 - 0) / 60 = 1,667.00

Note:

The examples used throughout this chapter are based on the following information, unless otherwise noted: Cost = $100,000, salvage value = 0, life months = 60, and acquisition date = 08/01/98.

16.4 Method 02 - Sum of the Year's Digits

The system applies changing fractions each year to the adjusted cost of the asset. When you use this depreciation method, you must indicate the current year-to-date (C) computation method.

16.4.1 What you Should Know About

Topic	Description
Current year-to-date (C)	(Cost - salvage value) * remaining useful life / sum of the years = year's depreciation. Year's depreciation / number of normal periods in the year = period depreciation. The following rules apply to this depreciation calculation: The system converts life periods into years. For example, 36 life months / 12 months = 3 years. The denominator is the sum-of-the-years digits (SYD), calculated as follows: SYD = n * ((n + 1) / 2) where n = useful life in years. For example, if life months equals 36 (3 years), the SYD is 6: 3 * ((3 + 1) / 2) = 6. The numerator is the remaining useful life at the beginning of the year. The system makes allocations throughout the useful life of the asset. For example, if you purchase an asset during the eighth month of the year, 5/12 of the first full year's depreciation is deductible in that year. In the second year, 7/12 of the first full year's depreciation, and 5/12 of the second year's depreciation are allowed. These allocations are followed for the entire life of the asset. To accommodate the mid-year convention for an asset, you must change the depreciation start date to the midpoint of the year.

Topic

Description

Current year-to-date (C)

(Cost - salvage value) * remaining useful life / sum of the years = year's depreciation. Year's depreciation / number of normal periods in the year = period depreciation.

The following rules apply to this depreciation calculation:

The system converts life periods into years. For example, 36 life months / 12 months = 3 years.
The denominator is the sum-of-the-years digits (SYD), calculated as follows:

SYD = n * ((n + 1) / 2) where n = useful life in years.

For example, if life months equals 36 (3 years), the SYD is 6:

3 * ((3 + 1) / 2) = 6.

The numerator is the remaining useful life at the beginning of the year.
The system makes allocations throughout the useful life of the asset. For example, if you purchase an asset during the eighth month of the year, 5/12 of the first full year's depreciation is deductible in that year. In the second year, 7/12 of the first full year's depreciation, and 5/12 of the second year's depreciation are allowed. These allocations are followed for the entire life of the asset.
To accommodate the mid-year convention for an asset, you must change the depreciation start date to the midpoint of the year.

16.5 Methods 03, 04, and 05 - Declining Balance to Cross-Over

The declining balance to cross-over methods use the following percentages:

Method 03 - 125%
Method 04 - 150%
Method 05 - 200%

Note:

Although the system does not consider the salvage value of an asset during the depreciation calculation, it will not depreciate an asset below its salvage value.

When you use a declining balance to cross-over method to depreciate an asset, you must indicate one of the following methods of computation:

Computation Method	Description
Inception-to-date (I)	((NBV * percentage) / life periods * elapsed periods) - Accumulated Depreciation = period depreciation. For example, using method 05, yearly depreciation would be calculated as follows: 1997: (( 100,000.00 * 200%) / 60) * 5) - 0.00 = 16,666.67 1998: (( 100,000.00 - 16,666.67) * 200% / 60) * 12 = 33,333.33 The following rules apply to this depreciation calculation: The cost less prior years' accumulated depreciation equals the net book value (NBV). Calculate NBV at the beginning of the year. When the NBV divided by remaining life months is greater than the depreciation for the period, you have reached "cross-over" for the asset. At this point, the depreciation for the period will equal the NBV divided by the remaining life months.
Remaining life (R)	NBV (if greater than zero) * percentage / remaining life periods = period depreciation. For example, yearly depreciation would be calculated as follows: 1997: 100,000.00 * 200% / 60 * 5 = 16,667.67 1998: 83,333.33 * 200% / 60 * 12 = 33,333.33 The following rules apply to this depreciation calculation: When NBV divided by the remaining periods is greater than the period depreciation, you have reached "cross-over" for the asset. The cost is reduced by the accumulated depreciation for purposes of calculating NBV at the end of each fiscal year. Remaining Life Periods equals the asset's life periods.
Alternative minimum tax (AMT)	You can use Method 04 (150% Declining Balance to Cross-over) for alternative minimum tax purposes.

Computation Method

Description

Inception-to-date (I)

((NBV * percentage) / life periods * elapsed periods) - Accumulated Depreciation = period depreciation.

For example, using method 05, yearly depreciation would be calculated as follows:

1997: (( 100,000.00 * 200%) / 60) * 5) - 0.00 = 16,666.67

1998: (( 100,000.00 - 16,666.67) * 200% / 60) * 12 = 33,333.33

The following rules apply to this depreciation calculation:

The cost less prior years' accumulated depreciation equals the net book value (NBV).
Calculate NBV at the beginning of the year.
When the NBV divided by remaining life months is greater than the depreciation for the period, you have reached "cross-over" for the asset. At this point, the depreciation for the period will equal the NBV divided by the remaining life months.

Remaining life (R)

NBV (if greater than zero) * percentage / remaining life periods = period depreciation.

For example, yearly depreciation would be calculated as follows:

1997: 100,000.00 * 200% / 60 * 5 = 16,667.67

1998: 83,333.33 * 200% / 60 * 12 = 33,333.33

The following rules apply to this depreciation calculation:

When NBV divided by the remaining periods is greater than the period depreciation, you have reached "cross-over" for the asset.
The cost is reduced by the accumulated depreciation for purposes of calculating NBV at the end of each fiscal year.
Remaining Life Periods equals the asset's life periods.

Alternative minimum tax (AMT)

You can use Method 04 (150% Declining Balance to Cross-over) for alternative minimum tax purposes.

16.6 Method 06 - Fixed Percent on Declining Balance

When you use the fixed percent on declining balance depreciation method, you must indicate one of the following methods of computation:

Computation Method	Description
Current year-to-date (C)	((Cost - accumulated depreciation) * fixed percent) / number of normal periods = period depreciation.
Current period (P)	The current period method of computation is the same as current year-to-date except that it does not "catch up" depreciation amounts within the year. If you run your first depreciation in March, the system calculates depreciation for March only. The system does not calculate depreciation for January and February.

16.7 Method 07 - ACRS Standard

You can use the Accelerated Cost Recovery System (ACRS) method to compute the tax depreciation deduction for most tangible depreciable property that you place in service after 1980 but before 1987. Cost recovery methods and period are the same for both new and used property. The system does not use the asset's salvage value to compute ACRS allowances.

ACRS standard depreciation uses only one method of computation:

Computation Method	Description
Current year-to-date (C)	(Cost - accumulated depreciation) * fixed percent based on ACRS IRS table) / number of normal periods = period depreciation.

16.7.1 Personal Property

The ACRS statutory recovery percentage for personal property that is placed in service after 1980 and before 1987 is determined by an IRS-prescribed table. The table takes into account the type of property (3-year, 5-year, 10-year, or 15-year) and the year you placed the property in service.

16.7.2 Real Property

Generally, the adjusted basis of real property is recovered over a period of 19 years for real property that is placed in service after May 8, 1985, but before 1987. For real property that is placed in service after March 15, 1984, but before May 9, 1985, the unadjusted basis is recovered over a period of 18 years. A 15-year recovery period applies to real property that is placed in service after 1980 but before March 16, 1984, and to low-income housing.

The recovery percentages for such property other than low-income housing is similar to the use of the 175% declining balance method with a later-year switch to the straight line method.

You can use the following conventions with the ACRS depreciation method:

Convention	Description
Full-month	Can be used for real property that you place in service before March 16, 1984, and for low-income housing. With the full-month convention, the system handles real property that you place in service at any time during a particular month as being placed in service on the first day of that month. This allows a full month's cost recovery for the month that you placed the property in service. If you dispose of the property anytime during a particular month, but before the end of a recovery period, you are not allowed cost recovery for the month you disposed of the property.
Mid-month	Can be used for real property that you place in service after March 15, 1984. With the mid-month convention, the system handles real property that you place in service anytime during a particular month as being placed in service at the middle of that month. This allows a one-half month's cost recovery for the month you placed the property in service. If you dispose of the property during a month, but before the end of a recovery period, you are allowed cost recovery for one-half of the month you disposed of the property.
Mid-year	With the regular method of ACRS standard depreciation, the mid-year convention is mandatory and built into the applicable tables. You are not allowed any deduction for the year you dispose of an asset.

16.8 Method 08 - ACRS Optional

If you prefer a slower recovery on the cost of ACRS property than the percentages provided, you might elect to use a straight line recovery method. This method provides a longer recovery period.

The ACRS optional depreciation method uses one of two methods of computation:

Computation Method	Description
Inception-to-date (I)	((Cost - Salvage Value) / life months) * elapsed months) - accumulated depreciation = period depreciation. For example, depreciation for January 1998 would be calculated as follows: (( 100,000.00 - 0) / 60) * 6) - 8,333.00 = 1,667.00
Remaining life (R)	((Net book value - salvage) / Remaining life periods) * months elapsed year-to-date) - year-to-date depreciation = period depreciation. For example, depreciation for January 1998 would be calculated as follows: (( 91,667.00 - 0) / 55) * 1) - 0 = 1,667.00 The following rules apply to this calculation: The cost less prior years' accumulated depreciation equals the net book value (NBV). If the NBV less salvage value is greater than zero, it is divided by the remaining life months as of the beginning of the current fiscal year.

Computation Method

Description

Inception-to-date (I)

((Cost - Salvage Value) / life months) * elapsed months) - accumulated depreciation = period depreciation.

For example, depreciation for January 1998 would be calculated as follows:

(( 100,000.00 - 0) / 60) * 6) - 8,333.00 = 1,667.00

Remaining life (R)

((Net book value - salvage) / Remaining life periods) * months elapsed year-to-date) - year-to-date depreciation = period depreciation.

For example, depreciation for January 1998 would be calculated as follows:

(( 91,667.00 - 0) / 55) * 1) - 0 = 1,667.00

The following rules apply to this calculation:

The cost less prior years' accumulated depreciation equals the net book value (NBV).
If the NBV less salvage value is greater than zero, it is divided by the remaining life months as of the beginning of the current fiscal year.

The calculation for ACRS Optional is the same as Straight Line except for the following:

The system bases the depreciation calculation on the cost, rather than the adjusted cost (cost less salvage value).
The system uses the mid-year convention for personal property.
The system calculates a full month of depreciation in the month that you acquire the property and no depreciation in the month that you dispose of it for 15-year real property.
The system calculates one-half month of depreciation in the months that you acquire and dispose of 18- and 19-year real property.
If depreciation information is 04 (ACRS method with Basis Reduction), the system reduces the cost by one-half of the Income Tax Credit (ITC) amount assigned on Master Information.

16.9 Method 09 - Units of Production

When you use the units of production depreciation method, you must indicate the current year-to-date method of computation:

Computation Method	Description
Current year-to-date (C)	(Year-to-date production / depreciable unit base * (asset cost - accumulated depreciation). The system calculates the depreciable unit base as follows: Original units +/- revisions to estimate - prior year's production = depreciable unit base.

Computation Method

Description

Current year-to-date (C)

(Year-to-date production / depreciable unit base * (asset cost - accumulated depreciation).

The system calculates the depreciable unit base as follows:

Original units +/- revisions to estimate - prior year's production = depreciable unit base.

You must run the Units of Production Close procedure to roll current year information forward into the following year.

16.10 Method 10 - MACRS Luxury Cars - Domestic

You must apply the following rules to this method of depreciation:

Method of computation must be current year-to-date
Life months must be 60
Convention must be mid-quarter (Q) or mid-year (Y)

You can take only a limited amount of annual depreciation on a passenger automobile for tax purposes:

Annual Depreciation	Amount
After 12/31/86 Before 01/01/89	1st year 2,560.00 2nd year 4,100.00 3rd year 2,450.00 4th year 1,475.00
After 12/31/88 Before 12/31/90	1st year 2,660.00 2nd year 4,200.00 3rd year 2,550.00 4th year 1,475.00
After 12/31/90 Before 12/31/91	1st year 2,660.00 2nd year 4,300.00 3rd year 2,550.00 4th year 1,575.00
After 12/31/91 Before 12/31/92	1st year 2,760.00 2nd year 4,400.00 3rd year 2,650.00 4th year 1,575.00
After 12/31/92 Before 01/01/94	1st year 2,860.00 2nd year 4,600.00 3rd year 2,750.00 4th year 1,675.00
After 12/31/93 Before 01/01/95	1st year 2,960.00 2nd year 4,700.00 3rd year 2,850.00 4th year 1,675.00
After 12/31/94 Before 01/01/96	1st year 3,060.00 2nd year 4,900.00 3rd year 2,950.00 4th year 1,775.00

16.11 Method 11 - Fixed Percent Luxury Cars - Foreign

Calculation: NBV * fixed percent = year's depreciation. Year's depreciation / number of normal periods = period depreciation.

The following rules apply to this method of depreciation:

You must use the current year-to-date (C) method of computation.
The depreciation amount for a year is limited to 2,000.00.

16.12 Method 12 - MACRS Standard

You must depreciate most tangible property that you place in service after 1986 using MACRS, for tax purposes. Depending on the type of property, you will recover the cost over a 3-, 5-, 7-, 10-, 15-, 20-, 27 1/2-, 31 1/2-, or 39-year period. You recover the cost using the applicable depreciation method, the applicable recovery period, and the applicable convention.

MACRS calculations use the following statutory recovery methods and conventions:

Recovery Method/Convention	Description
3-, 5-, 7-, and 10-year period calculations	The system calculates depreciation using the 200% declining balance method and the mid-year or mid-quarter convention, with a switch to the straight line method in later years.
27 1/2-, 31 1/2 , and 39-year period calculations	The system calculates depreciation using the straight line method and the mid-month convention.
15 and 20-year period calculations	The system calculates depreciation using the 150% declining balance method and the mid-year or mid-quarter convention, with a switch to straight line method in later years.

To compute depreciation, the system uses MACRS depreciation tables which contain the annual percentage depreciation rates to be applied to the adjusted basis of property in each tax year. The tables include the appropriate convention and a switch from the declining balance method to the straight line method in the appropriate year.

Use one of the following conventions with this depreciation method:

Convention	Description
Mid-month	You can apply this convention to residential and nonresidential real property. Based on this convention, the system calculates one-half month's depreciation for the month you acquired or disposed of the property.
Half-year	Apply this convention to property other than residential and nonresidential property. Based on this convention, the system calculates one-half year's depreciation for the year you acquire or dispose of the property.
Mid-quarter	You can apply this convention to all property other than nonresidential real property and residential rental property, if more than 40 percent of the total basis of such property is placed in service during the last three months of the tax year. Based on this convention, the system calculates depreciation at the midpoint of the quarter that you acquire or dispose of the property. The system computes the MACRS deduction for the first year by determining the depreciation for the full tax year and then multiplying it by one of the following percentages, depending on the quarter you placed the property in service: First quarter - 87 1/2% Second quarter - 62 1/2% Third quarter - 37 1/2% Fourth quarter - 12 1/2%

16.13 Method 13 - MACRS Alternative

You can use the MACRS alternative depreciation method for the following categories of property:

Tangible property used outside the U.S.
Property that is tax exempt
Property that is tax exempt and bond financed
Property that is imported from a foreign country for which an Executive Order is in effect because the country maintains trade restrictions or engages in other discriminatory acts
Property for which you have made an alternative MACRS election

If you use the MACRS Alternative depreciation method, you must indicate the inception-to-date (I), current period (P), or remaining life (R) method of computation. You must also indicate a mid-month, half-year, or mid-quarter convention.

16.14 Method 14 - ACRS Alternate Real Property

You can use this depreciation method to recover costs by using a straight line method over the regular recovery period or a longer recovery period. You must make this election on your tax return for the year that you placed the property in service. The ACRS straight line depreciation tables contain the annual percentage depreciation rates. The rates are applied to the unadjusted basis of property in each tax year.

You must indicate the current year-to-date method of computation with the ACRS Alternate Real Property depreciation method.

16.15 Method 15 - Fixed Percent of Cost

The system calculates the fixed percent of cost depreciation method as follows:

Cost * fixed percent = year's depreciation. Year's depreciation / number of normal periods = period depreciation.

You must indicate the current year-to-date (C) or current period (P) method of computation with this depreciation method. The current period method is the same as the current year-to-date with the exception that it does not "catch up" depreciation amounts within the year. If you run your first depreciation in March, the system calculates depreciation for the month of March only. The system does not calculate depreciation for January and February.

16.16 Method 16 - Fixed Percent on Declining Balance to Cross-Over

You must indicate one of the following methods of computation

Computation Method	Description
Remaining life (R)	NBV (if greater than zero) * fixed percent / life months = period depreciation. You must apply the following rules to this calculation: You have reached "cross-over" when the NBV divided by the remaining period is greater than the period depreciation. At this point, the period depreciation equals the NBV divided by the remaining periods. The cost is reduced by accumulated depreciation for purposes of calculating NBV at the end of each fiscal year.
Inception-to-date (I)	NBV * fixed percent / number of life months = period depreciation. Apply the following rules to this calculation: After each full year an asset is in service, the cost is reduced by the accumulated depreciation to determine the NBV. You have reached "cross-over" when the NBV divided by remaining life months is greater than the period depreciation. At this point, the depreciation for the period will equal the NBV divided by the remaining life months.

Computation Method

Description

Remaining life (R)

NBV (if greater than zero) * fixed percent / life months = period depreciation.

You must apply the following rules to this calculation:

You have reached "cross-over" when the NBV divided by the remaining period is greater than the period depreciation. At this point, the period depreciation equals the NBV divided by the remaining periods.
The cost is reduced by accumulated depreciation for purposes of calculating NBV at the end of each fiscal year.

Inception-to-date (I)

NBV * fixed percent / number of life months = period depreciation.

Apply the following rules to this calculation:

After each full year an asset is in service, the cost is reduced by the accumulated depreciation to determine the NBV.
You have reached "cross-over" when the NBV divided by remaining life months is greater than the period depreciation. At this point, the depreciation for the period will equal the NBV divided by the remaining life months.

16.17 Method 17 - AMT Luxury Autos

Apply the following rules to the AMT luxury autos method of depreciation:

The method of computation must be inception-to-date (I) or remaining life (R).
Life months must be 36 or 60.
Depreciation information must be mid-quarter convention (Q) or mid-year convention (Y).
The annual deduction is the amount calculated from 150% declining balance method (Method 04), subject to the cost recovery ceilings for passenger automobiles.

You can take only a limited amount of annual depreciation on a passenger automobile for tax purposes.

16.18 Method 18 - ACE Luxury Autos

Apply the following rules to ACE Luxury Autos method of depreciation:

Method of computation must be inception-to-date (I) or remaining life (R)
Life months must be 36 or 60
Depreciation information must be mid-quarter convention (Q) or mid-year convention (Y)

The annual depreciation is the amount calculated from the straight line method (Method 01), subject to the cost recovery ceilings for passenger automobiles.