Japan Accelerated (Method 35)

For the example that follows, these assumptions apply:

• Actual Start Date: May 15, 1997.

• Modified Start Date: July 2, 1997.

• Cost: 10.000 JPY (without tax).

• Salvage: 10 percent of cost.

• Asset Life: 7 years (84 life periods).

These tables show the depreciation of an asset when using depreciation method 35:

Year	End of Year Date	Accumulated Depreciation	Depreciation Expense
1997	December 31, 1997	-1.400	1.400
1998	December 31, 1998	-2.337	2.337
1999	December 31, 1999	-1.572	1.572
2000	December 31, 2000	-1.057	1.057
2001	December 31, 2001	-714	714
2002	December 31, 2002	-484	484
2003	December 31, 2003	-244	244

This table shows the second depreciation:

Year	2nd Accumulated Depreciation	2nd Depreciation Expense	Rule 1 Calculation	Rule 2 Calculation
1997	-252	252	10.000 * 28 percent * (6 / 12) Periods	10.000 * 28 percent * (6 / 12) Periods * 18 percent
1998	-397	397	(10.000 - 1.400 - 252) * 28 percent * (12 / 12) Periods* 17 percent	(10.000 - 1.400 - 252) * 28 percent * (12 / 12) Periods* 17 percent
1999	-267	267	(10.000 - 3.737 - 649) * 28 percent * (12 / 12) Periods	(10.000 - 3.737 - 649) * 28 percent * (12 / 12) Periods* 17 percent
2000	-169	169	(10.000 - 5.309 - 916) * 28 percent * (12 / 12) Periods	(10.000 - 5.309 - 916) * 28 percent * (12 / 12) Periods* 16 percent
2001	-107	107	(10.000 - 6.366 - 1.085) * 28 percent * (12 / 12) Periods	(10.000 - 6.366 - 1.085) * 28 percent * (12 / 12) Periods* 15 percent
2002	N/A	N/A	(10.000 - 7.080 - 1.192) * 28 percent * (12 / 12) Periods	N/A
2003	N/A	N/A	10.000 - 7.564 - 1.192 - 1000	N/A

This example uses primary and secondary rules. The demonstration data also includes a version using primary rules only. The primary and secondary rules use current year to date. The primary rules use only remaining compute direction.

Note: The SDA and SDE1 AAIs need to be set up for the secondary accounts. The AAIs can be set up with the same account as the primary accounts. These calculations can be done using only primary rules by including the secondary calculations within the primary rule formulas.

This table explains the requirements for method 35:

Requirement	Explanation
Asset life	The demonstration data includes versions of method 35 for an asset life of 84 life periods.
Balance adjustments	Year-end with annual depreciation Apportioned by period in the year, based on percent
Modified start date	The modified start date is the midyear, start of period, or half-year.
Conventions	The secondary account percent is set to allow two accumulated depreciation accounts and two depreciation expense accounts. The disposal convention matches the midyear and half-year initial term apportionment.
Life year rules	Primary rule life year 1 to 6 at a declining rate of 28 percent. Primary rule life year 7 is remaining basis (primary and secondary accounts), including salvage. Secondary rule life year 1 takes 18 percent of the declining balance. Secondary rule life years 2 to 3 take 17 percent of the declining balance. Secondary rule life year 4 takes 16 percent of the declining balance. Secondary rule life year 5 takes 15 percent of the declining balance.
Calculations	Basis times the percent rate of 28 percent, including accumulated depreciation. Basis includes the salvage value.
Disposals	Method 35 has no disposal rules.