Defining Additional Depreciation Methods
Once you start using a method you cannot update it. Enter another method if you need different rates.
To define a CALCULATED depreciation method:
1. Open the Depreciation Methods window.
2. Enter a depreciation Method name and Description.
3. Select Calculated from the Method Type poplist.
4. Choose whether this depreciation method allows you to depreciate an asset in the year it is retired.
5. Enter the number of Years and Months of asset life
To define a TABLE-BASED depreciation method:
1. Open the Depreciation Methods window.
2. Enter a depreciation Method name and Description.
3. Select Table from the Method Type poplist.
4. Choose whether this depreciation method allows you to depreciate an asset in the year it is retired.
5. Choose whether to use Cost or NBV as the basis for calculating depreciation from the Calculation Basis poplist.
6. Enter the number of Years and Months of asset life.
7. Enter the number of Prorate Periods Per Year this method uses.
8. Chose the Rates button to enter rates in the Depreciation Rates window.
9. Enter annual depreciation rates.
You must enter rates that fully depreciate an asset over its life. If you specify a calculation basis rule of Cost, the sum of all the years' rates for each period must be one. If you specify a calculation basis rule of NBV, the rate for the last year of life for each period must be one and all the other rates must be between zero and one.
Attention: For table methods, the annual rate you enter for each prorate period must reflect the fraction of the fiscal year the asset was in service. The rate must be prorated based on the number of periods in the year and on the prorate convention.
To define a UNITS OF PRODUCTION depreciation method:
- Select Production from the Method Type poplist.
To define a FLAT-RATE depreciation method:
1. Open the Depreciation Methods window.
2. Enter a depreciation Method name and Description.
3. Select Flat from the Method Type poplist.
4. Choose whether this depreciation method allows you to depreciate an asset in the year it is retired.
5. Choose whether to use Cost or NBV as the basis for calculating depreciation from the Calculation Basis Rule poplist.
6. Choose the Exclude Salvage Value check box if you want this method to exclude the salvage value from the depreciable basis. You can exclude salvage value only if you have a flat-rate method that uses NBV as the calculation basis.
7. Chose the Rates button to enter rates in the Depreciation Rates window.
9. Enter the adjusting rate, or loading factor.
See Also
Running Depreciation
Basic Depreciation Calculation
Depreciation Calculation
Depreciation Calculation for Flat-Rate Methods
Depreciation Calculation for Table and Calculated Methods
Depreciation Calculation for the Units of Production Method
Asset Depreciating Under Units of Production
