Korea Declining Balance (Method 45)

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).

• Salvage: 1,000 WON.

• Asset Life: 4 years (48 life periods).

This table shows the depreciation of an asset when using depreciation method 45:

Year	End of Year Date	Accumulated Depreciation	Depreciation Expense	Calculation
1997	December 31, 1997	-264.000	264.000	500.000 * 52.8 percent
1998	December 31, 1998	-124.608	124.608	(500.000 - 264.000) * 52.8 percent
1999	December 31, 1999	-58.815	58.815	(500.000 - 388.608) * 52.8 percent
2000	December 31, 2000	-51.577	51.577	(500.000 - 447.423) - 1.000
2001	December 31, 2001	N/A	N/A	N/A

Note: Another rule is also set up for assets in service prior to January 1, 1995.

This table explains the requirements for method 45:

Requirement	Explanation
Asset life	The demonstration data includes versions of method 45 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	No conventions are needed.
Life year rules	Life years 1 to 3 at a fixed rate of 52.8 percent, including accumulated depreciation. Life year 4 is remaining basis, including salvage.
Calculations	Basis times the percent rate of 52.8 percent, including accumulated depreciation. Basis includes salvage value.
Disposals	Method 45 has no disposal rules.