Oracle Assets provides the Depreciable Basis Rules feature to accommodate depreciation method setup requirements not met by the Cost or NBV calculation basis types. The combination of depreciable basis rule and depreciation method determine how depreciable basis is derived.
Choose the desired depreciable basis rule when you set up the depreciation methods. When you create transactions, the depreciable basis of the asset is calculated based on the depreciable basis rules specified in the Depreciable Basis Rule field.
Note: You can only use depreciable basis rules with flat-rate based methods, with the following exceptions: Beginning Period Balance and Period End Average can also be used with formula-based methods.
Use Recoverable Cost
Use Transaction Period Basis
Use Fiscal Year Beginning Basis
Flat Rate Extension
Period End Balance
Beginning Period Balance
Period End Average
Year to Date Average Balance
Year to Date Average with Half Year Rule
Year End Balance
Year End Balance with Positive Reduction Amount
Year End Balance with Half Year Rule
The following depreciable basis rules are applicable only to Polish tax depreciation. See: Polish Tax Depreciable Basis Rules.
Note: When you use one of the Polish Tax depreciable basis rules, the Method Type must be set to Flat and the Calculation Basis must be set to Cost.
Polish 30% with a Switch to Declining Classic and Flat Rate
Polish 30% with a Switch to Flat Rate
Polish Declining Modified with a Switch to Declining Classic and Flat Rate
Polish Declining Modified with a Switch to Flat Rate
Polish Standard Declining with a Switch to Flat Rate
The depreciable basis rules provide calculations as described below:
When the Use Recoverable Cost rule is used, the depreciable basis is equal to the new recoverable cost or Cost - Salvage Value. This depreciable basis rule is only available for the Flat rate method with Cost basis.
Current Period Depreciation Expense with Use Recoverable Cost = (Cost - Salvage Value) * Annual Depreciation Rate / Periods per Year
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Depreciation Method: | Flat Rate with Cost Basis Depreciation Basis Rule: Use Recoverable Cost |
| Depreciation Rate: | 30% |
| Salvage Value: | 20% |
| Group DPIS / Prorate Date: | 01-JAN-2000 |
| Depreciation Calendar: | Monthly |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 10,000 |
| Period Performed: | Mar-2000 |
| Amortization Start Date: | 01-MAR-2000 |
The table below illustrates asset and calculated amounts for the first four periods of 2000.
| Jan-2000 | Feb-2000 | Mar-2000 | Apr-2000 | |
|---|---|---|---|---|
| Asset A Cost | 30,000 | 30,000 | 40,000 | 40,000 |
| Asset A Depreciable Basis | 24,000 | 24,000 | 32,000 | 32,000 |
| Asset A Depreciation Expense | 600 | 600 | 800* | 800 |
| Asset A Accumulated Depreciation | 600 | 1,200 | 2,000 | 2,800 |
* Depreciation Expense in Mar-2000 = 32,000 * 30% / 12 = 800
This depreciable basis rule is available for Flat rate method with NBV basis only. NBV basis = Cost - Salvage Value - Accumulated Depreciation. The basis will be reset at the end of each fiscal year. If you have performed an amortize adjustment, the NBV basis will be reset at the amortization date.
Use Transaction Period Basis = (Cost - Salvage Value) - Accumulated Depreciation
This depreciable basis rule is available for the Flat rate method with NBV basis only. NBV basis = Cost - Salvage Value - Accumulated Depreciation as of the beginning of the fiscal year. The basis will be reset at the end of each fiscal year.
Use Fiscal Year Beginning Basis = (Cost - Salvage Value) - Accumulated Depreciation as of Beginning of the Fiscal Year
If you have performed an adjustment, the NBV basis will be reset as follows:
Use Fiscal Year Beginning Basis = Current Cost - Current Salvage Value - Recalculated Accumulated Depreciation as of the Beginning of the Fiscal Year
This rule supports depreciation method changes from flat-rate and NBV-based methods, to flat-rate and cost-based methods, which are legally required in Japan.
When you change the depreciation method from flat-rate and NBV-based, to flat-rate and cost-based depreciation, the adjustment is amortized. The depreciable basis becomes the NBV on the date amortization begins.
When this rule is applied to flat-rate and NBV-based depreciation methods, the behavior is the same as when the depreciable basis rule is set to Use Fiscal Year Beginning Basis. You can only apply this rule to flat-rate and cost/NBV-based depreciation methods.
For group assets, when member asset tracking is enabled with the Allocate Group Amount option, the depreciable basis of the fully reserved member assets will be removed from the group level depreciable basis. When member tracking is enabled with the Calculate Member Asset Amounts option, and the depreciation method selected is Cost, the depreciable basis of the fully reserved member assets will be removed from the group level depreciable basis.
The following is an example of flat rate extension.
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Method Type | Flat-Rate |
| Calculation Basis | NBV |
| Rate | 20% |
| Exclude Salvage Value | On |
| Depreciable Basis Rule | Use Fiscal Year Beginning Basis |
| Period | Q1-1998 |
| Calculation Basis Rate | NBV, 20% |
| Cost | 1,000,000 |
| Activity | Add new Assets |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Method Type | Flat-Rate |
| Calculation Basis | Cost |
| Rate | 25% |
| Salvage Value | 10% |
| Exclude Salvage Value | Off |
| Depreciable Basis Rule | Flat Rate Extension |
| Period | Q1-2000 |
| Calculation Basis Rate | Cost, 25% |
| Cost | 1,000,000 |
| Activity | Amortized Adjustment: Method Change Amortization Start Date: 01-JAN-2000 (Q1-2000) |
The table below illustrates depreciation calculated after the adjustment.
| Period | Cost | Depreciable Basis | Depreciation Expense | Accumulated Depreciation |
|---|---|---|---|---|
| Q4-1998 | 1,000,000 | 1,000,000 | 50,000 | 200,000 |
| Q1-1999 | 1,000,000 | 800,000 | 40,000 | 240,000 |
| Q2-1999 | 1,000,000 | 800,000 | 40,000 | 280,000 |
| Q3-1999 | 1,000,000 | 800,000 | 40,000 | 320,000 |
| Q4-1999 | 1,000,000 | 800,000 | 40,000 | 360,000 |
| Q1-2000 | 1,000,000 | 540,000 | 33,750 | 393,750 |
| Q2-2000 | 1,000,000 | 540,000 | 33,750 | 427,500 |
| Q3-2000 | 1,000,000 | 540,000 | 33,750 | 461,250 |
| Q4-2000 | 1,000,000 | 540,000 | 33,750 | 495,000 |
| Q1-2001 | 1,000,000 | 540,000 | 33,750 | 528,750 |
| Q2-2001 | 1,000,000 | 540,000 | 33,750 | 562,500 |
| Q3-2001 | 1,000,000 | 540,000 | 33,750 | 596,250 |
| Q4-2001 | 1,000,000 | 540,000 | 33,750 | 630,000 |
The following are calculations for the period Q1-2000:
[Depreciable Basis] = (1,000,000 - [Salvage Value]) - [Accumulated Depreciation] + [YTD Depreciation]
= (1,000,000 - 1,000,000*10%) - 360,000 - 0 = 540,000
[Depreciation Expense] = [Depreciable Basis] * [Rate] * (1/ [Period])
= 540,000 * 0.25 * (1/4) = 33,750
When the Period End Balance rule is used, current period depreciation is calculated as follows:
Current Period Depreciation Expense for Period End Balance = (Group Asset Balance at Period End * Annual Depreciation Rate) / Periods Per Year
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Group Asset: | Group A |
| Member Assets: | Asset 1 Asset 2 |
| Depreciation Method: | Flat Rate with Cost Basis Depreciable Basis Rule: Period End Balance |
| Depreciation Rate: | 30% |
| Depreciation Calendar: | Monthly |
| Group Asset DPIS / Prorate Date: | 01-JAN-2000 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 10,000 |
| Period Performed: | Mar-2000 |
| Amortization Start Date: | 01-MAR-2000 |
The table below illustrates asset and calculated amounts for the first four periods of 2000.
| Jan-2000 | Feb-2000 | Mar-2000 | Apr-2000 | |
|---|---|---|---|---|
| Asset 1 | 10,000 | 10,000 | 20,000 | 20,000 |
| Asset 2 | 20,000 | 20,000 | 20,000 | 20,000 |
| Group A Cost | 30,000 | 30,000 | 40,000 | 40,000 |
| Group A Depreciable Basis | 30,000 | 30,000 | 40,000 | 40,000 |
| Group A Depreciation | 750 | 750 | 1,000* | 1,000 |
| Group A Accumulated Depreciation | 750 | 1,500 | 2,500 | 3,500 |
* Group Depreciation Expense in Mar-2000 = (Group Asset Depreciable Basis * Annual Depreciation Rate) / Periods Per Year = (40,000 * 30%) / 12 = 1,000
When the Beginning Period Balance rule is used, current period depreciation is calculated as follows:
Current Period Depreciation Expense for Beginning Period Balance = (Group Asset Balance at Beginning of Period *Annual Depreciation Rate)/ Periods Per Year
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Group Asset: | Group A |
| Member Assets: | Asset 1 Asset 2 |
| Depreciation Method: | Flat Rate with Cost Basis Depreciation Basis Rule: Beginning Period Balance |
| Depreciation Rate: | 30% |
| Depreciation Calendar: | Monthly |
| Group Asset DPIS / Prorate Date: | 01-JAN-2000 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 10,000 |
| Period Performed: | Mar-2000 |
| Amortization Start Date: | 01-MAR-2000 |
The table below illustrates asset and calculated amounts for the first four periods of 2000.
| Jan-2000 | Feb-2000 | Mar-2000 | Apr-2000 | |
|---|---|---|---|---|
| Asset 1 | 10,000 | 10,000 | 20,000 | 20,000 |
| Asset 2 | 20,000 | 20,000 | 20,000 | 20,000 |
| Group A Cost | 30,000 | 30,000 | 40,000 | 40,000 |
| Group A Depreciable Basis | 0 | 30,000 | 30,000 | 40,000 |
| Group A Depreciation | 0 | 750 | 750 | 1,000* |
| Group A Accumulated Depreciation | 0 | 750 | 1,500 | 2,500 |
* Group Depreciation Expense in Apr-2000 = (Group Asset Depreciable Basis) * Annual Depreciation Rate / Periods Per Year = 40,000 * 30% / 12 = 1,000
When the Period Average Balance rule is used, current period depreciation is calculated as follows:
Current Period Depreciation Expense for Period Average Balance = (End of Current Period Balance + End of Previous Period Balance) /2 * Rate / Periods Per Year.
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Group Asset: | Group A |
| Member Assets: | Asset 1 Asset 2 |
| Depreciation Method: | Flat Rate with Cost Basis Depreciation Basis Rule: Period Average Balance |
| Depreciation Rate: | 30% |
| Depreciation Calendar: | Monthly |
| Group DPIS / Prorate Date: | 01-JAN-2000 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 10,000 |
| Period Performed: | Mar-2000 |
| Amortization Start Date: | 01-MAR-2000 |
The table below illustrates asset and calculated amounts for the first four periods of 2000.
| Jan-2000 | Feb-2000 | Mar-2000 | Apr-2000 | |
|---|---|---|---|---|
| Asset 1 | 10,000 | 10,000 | 20,000 | 20,000 |
| Asset 2 | 20,000 | 20,000 | 20,000 | 20,000 |
| Group A Cost | 30,000 | 30,000 | 40,000 | 40,000 |
| Group A Depreciable basis | 15,000 | 30,000 | 35,000* | 40,000 |
| Group A Depreciation | 375 | 750 | 875** | 1,000 |
| Group A Accumulated Depreciation | 375 | 1,125 | 2,000 | 3,000 |
* Group Asset Depreciable Basis in Mar-2000 = (End of Current Period Balance + End of Previous Period Balance) / 2 = (40,000 + 30,000) / 2 = 35,000
** Group Asset Depreciation Expense Mar-2000 = Group Asset Depreciable Basis * Annual Depreciation Rate / Periods Per Year = 35,000 * 30% / 12 = 875
When the Year to Date Average Balance rule is used, current period depreciation is calculated as follows:
Current Period Depreciation Expense for Year to Date Average Balance = (End of Current Period Balance + End of Previous Year Balance) / 2 * Rate / Periods Per Year
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Group Asset: | Group A |
| Member Assets: | Asset 1 - cost adjusted in Mar-2000 Asset 2 - cost adjusted in Feb-2000 |
| Depreciation Method: | Flat Rate with Cost Basis Depreciation Basis Rule: YTD Average Balance |
| Depreciation Rate: | 30% |
| Depreciation Calendar: | Monthly |
| Group DPIS / Prorate Date: | 01-JAN-2000 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 10,000 |
| Period Performed: | Mar-2000 |
| Amortization Start Date: | 01-MAR-2000 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 20,000 |
| Period Performed: | Feb-2000 |
| Amortization Start Date: | 01-FEB-2000 |
The table below illustrates asset and calculated amounts for the first four periods of 2000.
| Jan-2000 | Feb-2000 | Mar-2000 | Apr-2000 | |
|---|---|---|---|---|
| Asset 1 | 10,000 | 10,000 | 20,000 | 20,000 |
| Asset 2 | 20,000 | 40,000 | 40,000 | 40,000 |
| Group A Cost | 30,000 | 50,000 | 60,000 | 60,000 |
| Group A Depreciable Basis | 15,000 | 25,000* | 30,000** | 30,000 |
| Group A Depreciation | 375 | 625 | 750*** | 750 |
| Group A Accumulated Depreciation | 375 | 1,000 | 1,750 | 2,500 |
* Group Asset Depreciable Basis in Feb-2000 = (End of Current Period Balance + End of Previous Year Balance) / 2 = (50,000 + 0) / 2 = 25,000
** Group Asset Depreciable Basis in Mar-2000 = (End of Current Period Balance + End of Previous Year Balance) / 2) = (60,000 + 0) / 2 = 30,000
*** Group Asset Depreciation Expense Mar-2000 = (Group Asset Depreciable Basis * Annual Depreciation Rate) / Periods Per Year = (30,000 * 30%) / 12 = 750
This depreciable basis rule is only available for the Flat rate method with Cost basis. When the Year to Date Average with Half Year rule is used, current period depreciation is calculated as follows:
Current Period Depreciation Expense for Year to Date Average with Half Year rule = (((End of Current Period Balance + End of Previous Year Balance) / 2 * Rate) - Year to Date Depreciation ) / Remaining Fiscal Periods
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Group Asset: | Group A |
| Member Assets: | Asset 1 Asset 2 |
| Depreciation Method: | Flat Rate with Cost Basis Depreciation Basis Rule: Year to Date Average with Half Year rule |
| Depreciation Rate: | 30% |
| Depreciation Calendar: | Monthly |
| Group DPIS / Prorate Date: | 01-JAN-2000 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 10,000 |
| Period Performed: | Mar-2000 |
| Amortization Start Date: | 01-MAR-2000 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 20,000 |
| Period Performed: | Feb-2000 |
| Amortization Start Date: | 01-FEB-2000 |
The table below illustrates asset and calculated amounts for the first four periods of 2000.
| Jan-2000 | Feb-2000 | Mar-2000 | Apr-2000 | |
|---|---|---|---|---|
| Asset 1 | 10,000 | 10,000 | 20,000 | 20,000 |
| Asset 2 | 20,000 | 40,000 | 40,000 | 40,000 |
| Group A Cost | 30,000 | 50,000 | 60,000 | 60,000 |
| Group A Depreciation | 375* | 647.73** | 797.73*** | 797.73 |
| Group A Accumulated Depreciation | 375 | 1,022.73 | 1,820.46 | 2,618.19 |
| Group A Year to Date Depreciation | 375 | 1,022.73 | 1,820.46 | 2,618.19 |
* Group A Depreciation Expense in Jan-2000 = (((End of Current Period Balance + End of Previous Year Balance) / 2) x Annual Depreciation Rate - Year to Date Depreciation ) / Remaining Fiscal Year Periods = ((( 30,000 + 0 ) / 2 ) x 30% - 0 ) / 12 = 375
** Group A Depreciation Expense in Feb-2000 = (((End of Current Period Balance + End of Previous Year Balance) / 2) x Annual Depreciation Rate - Year to Date Depreciation ) / Remaining Fiscal Year Periods = ((( 50,000 + 0 ) / 2 ) x 30% - 375 ) / 11 = 647.73
*** Group A Depreciation Expense in Mar-2000 = (((End of Current Period Balance + End of Previous Year Balance) / 2) x Annual Depreciation Rate - Year to Date Depreciation ) / Remaining Fiscal Year Periods = ((( 60,000 + 0 ) / 2 ) x 30% - 1,022.73 ) / 10 = 797.73
End of Current Fiscal Year balance. This depreciable basis rule is available for the Flat method with NBV basis only.
Current Period Expense for Year End Balance = Current Period YTD Depreciation - Prior Period Ytd Depreciation
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Group Asset: | Group A |
| Member Assets: | Asset 1 Cost adjusted in FY2002 Asset 2 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Depreciation Method: | Flat Rate with NBV Basis Depreciation Basis Rule: Year End Balance |
| Depreciation Rate: | 30% |
| Group DPIS / Prorate Date: | 01-JAN-2000 |
| Depreciation Calendar: | Yearly |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 10,000 |
| Period Performed: | FY-2002 |
| Amortization Start Date: | 01-JAN-2002 |
The table below illustrates asset and calculated amounts for four years.
| FY 2000 | FY 2001 | FY 2002 | FY 2003 | |
|---|---|---|---|---|
| Asset 1 | 10,000 | 10,000 | 20,000 | 20,000 |
| Asset 2 | 20,000 | 20,000 | 20,000 | 20,000 |
| Group Asset A Cost | 30,000 | 30,000 | 40,000 | 40,000 |
| Group Asset A Depreciable Basis | 30,000 | 21,000 | 24,700* | 17,290 |
| Group A Depreciation Expense | 9,000 | 6,300 | 7,410** | 5,187 |
| Group A Accumulated Depreciation | 9,000 | 15,300 | 22,710 | 27,897 |
* Group Asset A Depreciable Basis in FY-2002 = Cost - Salvage Value - Accumulated Depreciation = 40,000 - 15,300 - 24,700
(Additions + / - Adjustments) - (Proceeds of Sales - Cost of Removal) > 0
** Group Asset Depreciation Expense in FY-2002 = Depreciable Basis * Annual Rate = 24,700 * 30% = 7,410
This rule can be applied to Flat method with Cost or NBV basis. The Reduction Rate field is enabled only for group and member assets, and it is not enabled for standalone assets.
In Canada, if the following calculation is greater than zero in any given period for a group asset, then half of the excess amount must be deducted from the depreciable basis when calculating the group depreciation amount. The calculation is as follows:
(Additions + / - Adjustments) - Proceeds of Sales - Cost of Removal > 0
However, some groups may be exempted from 50% rule. In order to accommodate Canada's 50% rule, you must select the Year End Balance with Positive Reduction Amount depreciable basis rule for the group asset depreciation method, and enter the reduction rate of 50% for the group asset.
You may enter a reduction rate for the group asset if the group asset has this depreciable basis rule setup in the depreciation method.
Note: The Year End Balance with Positive Reduction Amount rule is applicable only to Group Assets (not for standalone assets).
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Group Asset: | Group A |
| Member Assets: | Asset 1 Cost adjusted in FY2002 Asset 2 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Depreciation Method: | Flat Rate with NBV Basis Depreciation Basis Rule: Year End Balance with Positive Adjustment Amount |
| Depreciation Rate: | 30% |
| Reduction Rate: | 50% |
| Group DPIS / Prorate Date: | 01-JAN-2000 |
| Depreciation Calendar: | Yearly |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Cost Adjustment: | 10,000 |
| Period Performed: | FY-2002 |
| Amortization Start Date: | 01-JAN-2002 |
The table below illustrates asset and calculated amounts for four years.
| FY 2000 | FY 2001 | FY 2002 | FY 2003 | |
|---|---|---|---|---|
| Asset 1 | 10,000 | 10,000 | 20,000 | 20,000 |
| Asset 2 | 20,000 | 20,000 | 20,000 | 20,000 |
| Group Asset A Cost | 30,000 | 30,000 | 40,000 | 40,000 |
| Group Asset A Depreciable Basis | 15,000* | 25,500** | 22,850*** | 20,995 |
| Group A Depreciation Expense | 4,500 | 7,650 | 6,855**** | 6,298.50 |
| Group A Accumulated Depreciation | 4,500 | 12,150 | 19,005 | 25,303.50 |
* Group A Depreciable Basis in FY 2000 = Cost - Salvage Value - Accumulated Depreciation - Reduced Amount = 30,000 - (30,000 * 50%) = 15,000
** Group A Depreciable Basis in FY 2001 = 30,000 - 4,500 = 25,500
*** Group A Depreciable Basis in FY 2002 = 40,000 - 12,150 - 10,000 * 50% = 22,850
**** Group A Depreciation Expense in FY 2002 = Depreciable Basis * Annual Rate = 22,850 * 30% = 6,855
The Year End Balance with Half Year Rule basis rule can be applied to the Flat method with NBV basis. The Reduction Rate field is enabled only for group and member assets, and it is not enabled for standalone assets.
In India, if a member asset is added during the second half of the fiscal year, the depreciation rate is reduced by 50% for the member asset. Otherwise, 100% of depreciate rate can be used if the member asset is placed into service during the first half of the fiscal year.
In order to accommodate India's 50% rule, you must select the Year End Balance with Half Year Rule depreciable basis rule for the group asset depreciation method, and enter the reduction rate of 50% for the group asset. You also need to enter the Mid Year Start Date on the Fiscal Year setup window.
If the date placed in service is in the first half of the year, use 100% of Group Depreciation Rate.
If the date placed in service is in the second half of the year, use 50% of Group Depreciation Rate.
You may enter a reduction rate for the group asset if the group asset has this depreciable basis rule setup in the depreciation method.
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Group Asset: | Group A |
| Member Assets: | Asset 1 DPIS: 01-JAN-2000 Asset 2 DPIS: 01-AUG-2000 |
The following table contains asset setup information used in this example.
| Asset Setup Item | Asset Setup Information |
|---|---|
| Depreciation Method: | Flat Rate with NBV Basis Depreciation Basis Rule: Year End Balance with Half Year Rule |
| Depreciation Rate: | 30% |
| Reduction Rate: | 50% |
| Group DPIS / Prorate Date: | 01-JAN-2000 |
| Depreciation Calendar: | Yearly |
| Mid Year Start Date: | 01-JUL-2000 |
The table below illustrates asset and calculated amounts for four years.
| FY 2000 | FY 2001 | FY 2002 | FY 2003 | |
|---|---|---|---|---|
| Asset 1 | 10,000 | 10,000 | 10,000 | 10,000 |
| Asset 2 | 20,000 | 20,000 | 20,000 | 20,000 |
| Group Asset A Cost | 30,000 | 30,000 | 30,000 | 30,000 |
| Group Asset A Depreciable Basis | 20,000* | 24,000*** | 16,800 | 11,760 |
| Group A Depreciation Expense | 6,000** | 7,200 | 5,040 | 3,528 |
| Group A Accumulated Depreciation | 6,000 | 13,200 | 18,240 | 21,768 |
* Group A Depreciable Basis in FY 2000 = Cost - Salvage Value - Accumulated Depreciation - Reduced Amount = 30,000 - (20,000 * 50%) = 20,000
** Group A Depreciation Expense in FY 2000 = Depreciable Basis * Annual Rate = 20,000 * 30% = 6,000
***Group A Depreciable Basis in FY 2001 = 30,000 - 6,000 = 24,000
Navigate to the Depreciation Methods window.
In the Method field, enter a name for your depreciation method.
In the Description field, enter a description for your depreciation method.
Select Flat from the Method Type poplist.
Choose whether to use Cost or NBV as the basis for calculating depreciation from the Calculation Basis Rule poplist.
Select the Depreciable Basis Rule.
Note: When you select Flat in the Method Type field, the Depreciable Basis Rule field becomes required. You can update the defaulted value.
Check the Depreciate in Year Retired check box if you want depreciation calculated in the year retired.
Check the Exclude Salvage Value check box if you want this method to exclude the salvage value from the calculation of Cost - Salvage Value.
Choose the Rates button to enter rates in the Depreciation Rates window.
Enter the basic rates.
Enter the adjusting rate, or loading factor.
Save your work.