Methods 03, 04, and 05, Declining Balance with Cross-Over

The declining balance to cross-over methods use these percentages:

• Method 03: 125 percent

• Method 04: 150 percent

• Method 05: 200 percent

Although the system does not consider the salvage value of an asset during the depreciation calculation, it does not depreciate an asset below its salvage value.

When you use a declining balance to cross-over method to depreciate an asset, you must indicate one of these methods of computation:

Calculation Method	Description
Inception-to-date (I)	((NBV * percentage) / (life periods) * (elapsed periods))- (Accumulated Depreciation) = (period depreciation) For example, using method 05, yearly depreciation is calculated as follows: 1997: (((100,000.00 * 200 percent) / 60) * 17) - 16,667.00 = 40,000.00 1998: ((100,000.00 - 16,667.00) * 200 percent / 60) * 12 = 33,333.00 These rules apply to this depreciation calculation: The cost less accumulated depreciation for prior years equals the net book value (NBV). Calculate NBV at the beginning of the year. When the NBV divided by remaining life months is greater than the depreciation for the period, you have reached cross-over for the asset. At this point, the depreciation for the period equals the NBV divided by the remaining life months.
Remaining life (R)	(NBV (if greater than zero)) * percentage / (remaining life periods) = (period depreciation) For example, yearly depreciation would be calculated as follows: 1996: 100,000.00 * 200 percent / 60 * 5 = 16,667.00 1997: 83,333.00 * 200 percent / 60 * 12 = 33,333.00 These rules apply to this depreciation calculation: When NBV divided by the remaining periods is greater than the period depreciation, you have reached cross-over for the asset. The cost is reduced by the accumulated depreciation to calculate NBV at the end of each fiscal year.
Alternative minimum tax (AMT)	You can use Method 04 (150 percent Declining Balance to Cross-over) for alternative minimum tax purposes.