Korea Special Rate SL (Method 48)

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 48:

Year	End of Year Date	Accumulated Depreciation	Depreciation Expense
1997	December 31, 1997	-264.000	264.000
1998	December 31, 1998	-54.912	54.912
1999	December 31, 1999	-11.422	11.422
2000	December 31, 2000	-3.499	3.499
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	-132.000	132.000	500.000 * 52.8 percent	(500.000 * 52.8 percent) * 50 percent
1998	-27.546	27.546	(500.000 - 396.000) * 52.8 percent	(500.000 - 396.000) * 52.8 percent * 50 percent
1999	-5.711	5.711	(500.000 - 478.368) * 52.8 percent	(500.000 - 478.368) * 52.8 percent * 50 percent
2000	N/A	N/A	500.000 - 495.501 - 1.000	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 48:

Requirement	Explanation
Asset life	The demonstration data includes versions of method 48 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 3 take 52.8 percent of cost. Secondary life years 1 to 3 take 52.8 percent of cost at the rate of 50 percent. Primary life year 4 and onward depreciate remaining basis, including salvage.
Calculations	Primary 52.8 percent. Secondary 52.8 percent of cost at the rate of 50 percent. Remaining basis includes salvage value.
Disposals	Method 48 has no disposal rules.