Korea Special Rate SL (Method 44)

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).

These tables show the depreciation of an asset when using depreciation method 44:

Year	End of Year Date	Accumulated Depreciation	Depreciation Expense
1997	December 31, 1997	-125.000	125.000
1998	December 31, 1998	-125.000	125.000
1999	December 31, 1999	-124.000	124.000
2000	December 31, 2000	N/A	N/A
2001	December 31, 2001	N/A	N/A

This table shows the second depreciation:

Year	2nd Accumulated Depreciation	2nd Depreciation Expense	Rule 1 Calculation	Rule 2 Calculation
1997	-62.500	62.500	500.000 * 25 percent	(500.000 * 25 percent) * 50 percent
1998	-62.500	62.500	500.000 * 25 percent	(500.000 * 25 percent) * 50 percent
1999	N/A	N/A	500.000 - 250.000 - 125.000 - 1.000	N/A
2000	N/A	N/A	N/A	N/A
2001	N/A	N/A	N/A	N/A

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 by using only primary rules, including the secondary calculations within the primary rule formulas.

This table explains the requirements for method 44:

Requirement	Explanation
Asset life	The demonstration data includes versions of method 44 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. Set the convention to allow two accumulated depreciation accounts and two depreciation expense accounts.
Life year rules	Primary life years 1 to 2 take 25 percent of cost. Secondary life years 1 to 2 take 25 percent of cost at the rate of 50 percent. Primary life year 3 and onward depreciate remaining basis, including salvage.
Calculations	Primary 25 percent. Secondary 25 percent of cost at the rate of 50 percent. Basis includes salvage value.
Disposals	Method 44 has no disposal rules.