Adding Rules

Specify the code for additional depreciation information. This code is used for investment tax credit (ITC) and averaging conventions. The system validates the code you enter in this field against UDC table (12/AC).

Values are:

A: Actual Depreciation Start.

F: First-half/2nd-half convention.

H: Half-Year.

M: Mid-Month Convention.

N: 1st Day of Next Period.

P: Middle of Period.

Q: Mid-Quarter Convention.

R: 1st Day of Next Year.

S: 1st Actual/2nd Period Start.

Y: Mid-Year Convention.

W: Whole Year Convention.

0: No ITC Taken.

1: Three Year Method (3 1/3 percent).

2: Five Year Method (6 2/3 percent).

3: Seven Year Method (10 percent).

4: ACRS with Basis Reduction - 10 percent ITC.

5: ACRS without Basis Reduction.

Note:

Numeric codes apply to standard depreciation methods only. To determine the date for F (First-half/Second-half), use these guidelines:

If the asset was placed in service in the first half of the year, then the adjusted depreciation start date is the first day of the year.

If the asset was placed in service in the second half of the year, then the adjusted depreciation start date is the first day of the succeeding year.

The first half of the year expires at the close of the last day of the calendar month that is closest to the middle of the tax year.

The second half of the year begins the day after the expiration of the first half of the tax year.

Specify the method that the system uses to calculate depreciation based on the depreciation method you specified. Values are:

C: Current year to date.

Calculates only the current year's depreciation.

I: Inception to date.

Recalculates the entire depreciation amount from the start date through the current year. Prior year depreciation is then subtracted to determine current year depreciation. This method results in a one-time current period correction for any errors in prior period depreciation.

F: Inception to date - first rule.

Calculates inception to date (rule I) for the first rule (if there are two rules) and calculates current year to date (rule C) for the second rule.

P: Current period.

Calculates depreciation for the current period and then extrapolates the annual amount based on the cumulative percentage from the period pattern and year-to-date posting. Any depreciation calculated for the current period is subtracted.

R: Remaining months.

Depreciates the net book value as of the beginning of the current tax year over the remaining life of the asset. This results in the amortization of prior period calculation errors over the remaining life of the asset.

Specify the ending date for which the transaction or code is applicable.

Specify the life of an asset in months or periods. The system uses months or periods only to express the life of an asset. For example, if the company uses a 12 month calendar, then a five year ACRS asset has a 60 month life. If the company uses a 13 month calendar, then a five year ACRS asset has a 65 month life, and so on. You must specify a life month value for all user-defined depreciation methods and for all standard depreciation methods.

Specify the date on which an address, item, transaction, or table record becomes active. The meaning of this field differs, depending on the program. For example, the effective date can represent any of these:

The date on which a change of address becomes effective.
The date on which a lease becomes effective.
The date on which a price becomes effective.
The date on which the currency exchange rate becomes effective.
The date on which a tax rate becomes effective.

Enter a description of the rule.

Specify the code that identifies date patterns. You can use one of 15 codes. You must set up special codes (letters A through N) for 4-4-5, 13-period accounting, or any other date pattern unique to the environment. An R, the default, identifies a regular calendar pattern.

Use this field to reference a date pattern that is specific to the initial term for asset depreciated under the rule. This is particularly useful if the date patterns the company uses now are different from previous years due to mergers or short years. The system refers to this pattern in order to adjust the depreciation start date.