Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000 and you are using a 20% flat-rate that you apply to the beginning of year net book value. In Year 2, Quarter 3, you change the flat-rate to 25%.
| Account Description | Debit | Credit |
|---|---|---|
| Depreciation Expense | 187.50 | |
| Depreciation Expense (adjustment) | 255.00 | |
| Accumulated Depreciation | 442.50 |
| Account Description | Debit | Credit |
|---|---|---|
| Depreciation Expense | 200.00 | |
| Accumulated Depreciation | 200.00 |