Accumulated Depreciation

Currency Translator makes a special adjustment when the accumulated depreciation formula is:

Accumulated Depreciation =	Accumulated depreciation (prior period)
	+ Depreciation expense (Funds)
	Accumulated depreciation on retirements

Example:

Depreciation	Deutschemarks	Rate	Dollars	Rate
Acc. Dep. (year 1)	1200	.75	900	year-end rate (year 1)
Depr. exp. (year 2)	1220	.72	878.4	weighted average rate
Retirements (year 2)	(120)	.72	(86.4)	weighted average rate
Acc. Dep. (year 2)	2300	.60	1380	year-end rate (year 2)

In this circumstance, Depreciation Expense: Funds = Depreciation Expense: Book before translation but not after, so the dollars column is not balanced. Currency Translator adjusts depreciation expense to correct the imbalance by adding -312 to 878.4, and stores the adjustment value in the Adjustment to Accumulated Depreciation (v2190.4.000) account.

The adjustment formula:

Adjustment to Accumulated Depreciation =	Accumulated depreciation
	- Accumulated depreciation (prior paid)
	- Depreciation expense (funds)
	+ Accumulated depreciation on retirements