Korea Capital Expenditure SL (Method 43)
For the example that follows, these assumptions apply:
Actual Start Date: July 15, 1997.
Modified Start Date: January 1, 1997.
Cost: 500.000 WON (without tax); additional revaluation 300.000 in 2000.
Salvage: 1,000 WON.
Asset Life: 4 years (48 life periods).
This table shows the depreciation of an asset when using depreciation method 43:
Year |
End of Year Date |
Accumulated Depreciation |
Depreciation Expense |
Calculation |
---|---|---|---|---|
1997 |
December 31, 1997 |
-125.000 |
125.000 |
500.000 * 25 percent |
1998 |
December 31, 1998 |
-125.000 |
125.000 |
500.000 * 25 percent |
1999 |
December 31, 1999 |
-125.000 |
125.000 |
500.000 * 25 percent |
2000 |
December 31, 2000 |
-200.000 |
200.000 |
800.000 * 25 percent |
2001 |
December 31, 2001 |
-200.000 |
200.000 |
800.000 * 25 percent |
2002 |
December 31, 2002 |
-24.000 |
24.000 |
800.000 - 775.000 - 1.000 |
This table explains the requirements for method 43:
Requirement |
Explanation |
---|---|
Asset life |
The demonstration data includes versions of method 43 for asset lives of 48 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 whole year. |
Conventions |
Allow depreciation beyond the asset's life, but do not exceed remaining basis. |
Life year rules |
Life years 1 to 3 take 25 percent. Life years 4 to 4 take 50 percent remaining basis, not including salvage. Life year 5 depreciates remaining basis, including salvage. |
Calculations |
Cost at the rate of 25 percent. Half of remaining basis, not including salvage. Basis includes salvage value. |
Disposals |
Method 43 has no disposal rules. |