The Depreciation Calculation Process

PeopleSoft Asset Management performs five basic steps to calculate depreciation for an asset. It calculates:

1. The asset's beginning depreciation date.

2. The asset's remaining life and remaining value.

3. The asset's yearly depreciation.

4. The asset's period depreciation allocation.

5. The asset's prior period depreciation.

PeopleSoft Asset Management depreciation calculation process flow.

The following sections provide illustrative examples of how PeopleSoft Asset Management handles all of these calculations in a variety of different scenarios.

Note:

PeopleSoft Asset Management calculates depreciation yearly, not by month or by period. It then allocates yearly depreciation among the year's periods, except when you select the Declining Balance depreciation method or the Declining Balance method with a switch to the Straight Line method and the monthly depreciation option is selected.