French Declining Balance (Method 20)

For the example that follows, these assumptions apply:

• Actual Start Date: June 15, 1997.

• Modified Start Date: June 1, 1997.

• Cost: 100.000 FRF (without tax).

• Asset Life: 5 years (60 life periods).

This table shows the depreciation of an asset when using depreciation method 20:

Year	End of Year Date	Accumulated Depreciation	Depreciation Expense	Calculation
1997	December 31, 1997	-23.333,33	23.333,33	100.000 * 40 percent / 12*7
1998	December 31, 1998	-30.666,66	30.666,66	(100.000-23.333,33) * 40 percent
1999	December 31, 1999	-18.400,00	18.400,00	(76.666,67-30.666,66) * 40 percent
2000	December 31, 2000	-13.800,00	13.800,00	(46.000,01-18.400,00)/2
2001	December 31, 2001	-13.800.00	13.800,00	13.800,00

Note: Even though the asset life is complete on May 31, 2002, the system calculates depreciation for five complete periods in the fiscal year (December 31, 2001). The calculations for the initial year are based on periods, rather than on days.

This table explains the requirements for method 19:

Requirement	Explanation
Asset life	The demonstration data includes versions of method 20 for an asset life of 36, 48, 60, 72, and 84 life periods.
Balance adjustments	End of the year with annual depreciation Apportioned by period in the year, based on percent
Modified start date	The modified start date is the start of the period. This method calculates the initial year percent by periods in the first year.
Conventions	No conventions are needed.
Life year rules	The first life year is from year 1 to 2 years less than the total number of years. The second life year is for 1 year less than the total number of years. The third life year is for the last year in the asset's life. For example, if the asset has a life of five years, the first life year corresponds to years 1 through 3, the second life year corresponds to year 4, and the third life year corresponds to year 5.
Disposals	Method 20 has no disposal rules.