Japan Beginning Special (Method 34)

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: 5 years (60 life periods).

These tables show the depreciation of an asset when using depreciation method 34:

Year	End of Year Date	Accumulated Depreciation	Depreciation Expense
1997	December 31, 1997	-1.845	1.845
1998	December 31, 1998	-2.456	2.456
1999	December 31, 1999	-1.549	1.549
2000	December 31, 2000	-978	978
2001	December 31, 2001	-617	617
2002	December 31, 2002	-55	55

This table shows the second depreciation:

Year	2nd Accumulated Depreciation	2nd Depreciation Expense	Rule 1 Calculation	Rule 2 Calculation
1997	-1.500	1.500	10.000 * 36.9 percent (6 / 12) Periods	10.000*15 percent
1998	N/A	N/A	10.000 * 36.9 percent * (12 / 12) Periods	N/A
1999	N/A	N/A	(10.000 - 5.801) * 36.9 percent * (12 / 12) Periods	N/A
2000	N/A	N/A	(10.000 - 7.350) * 36.9 percent * (12 / 1) Periods	N/A
2001	N/A	N/A	(10.000 - 8.328) * 36.9 percent * (12 / 12) Periods	N/A
2002	N/A	N/A	(10.000 - 8.945) - 1.000	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 34:

Requirement	Explanation
Asset life	The demonstration data includes versions of method 34 for an asset life of 60 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	Life year 1 to 5 at a fixed rate percent. Secondary rule 1 to 1 takes an extra 15 percent the first year. Life year 6 is remaining basis (primary and secondary accounts), including salvage.
Calculations	Basis times the percent rate of 36.9 percent, including accumulated depreciation. Basis includes the salvage value.
Disposals	Method 34 has no disposal rules.