An asset with an original cost of $3,000 is depreciated yearly over three years beginning January 1, 2006, using the straight line method with no salvage value.
- Depreciation beginning January 1, 2006 means that the acquisition date is 12/31/2006. This can be the purchase date of an asset or when the asset was put into service.
- The asset form is updated with current period depreciation, net book value, and cumulative depreciation periodically based on timescale units. If the timescale units are years, these data elements on the asset detail form should be updated every year with the calculated values displayed on the depreciation sheet. In this example, the asset detail form will be updated every January.
The depreciation table would look like this:
Period | Starting Book Value | Current Period Depreciation | Net Book Value | Cumulative Depreciation |
|---|---|---|---|---|
12/31/2006 | 3000 (Acquisition Cost) | 1000 | 2000 (3000-2000) | 1000 |
12/31/2007 | 2000 (Previous Net Book Value) | 1000 | 1000 (2000-1000) | 2000 |
12/31/2008 | 1000 (Previous Net Book Value) | 1000 | 0 (1000-1000) | 3000 |