General Information
Default Menu Location: Maintain >> Asset Tracking >> Asset Information OR the Assets icon in the toolbar
The Depreciation Information screen is a jump screen (a screen launched from an attribute) launched from the Asset Information screen.
Screen Name: ASSETDEP
Function: Setup fixed asset depreciation information.
Click here for the Depreciation Information Screen
- There are four separate tracking/reporting tools (Federal, State, Book, AMT) and you may use different methods for each asset.
- The Book tab has two extra Account fields for posting depreciation expenses to the General Ledger.
Fields
Method: The accounting method of depreciation to be used
- SL - Straight-line method. This takes an estimated scrap value of the asset at the end of its life and subtracts it from its original cost. This result is then divided by management's estimate of the number of useful years of the asset. The company expenses the same amount of depreciation each year. Straight line depreciation = (original costs of asset – scrap value)/estimated asset life
- DB200 - Accelerated Double-declining balance. This method writes off depreciation costs more quickly than the straight-line method. Generally, the purpose behind this is to minimize taxable income. This method essentially doubles the rate of depreciation of the straight-line method: 2 x (original costs of asset – scrap value / est'd asset life). Switchover to SL is automatically made when the annual depreciation using the declining balance method becomes less than the annual depreciation using the straight line method.
- DB150 - Accelerated 1.5x-declining balance. This method essentially multiplies the rate of depreciation of the straight-line method by 1.5: 1.5 x (original costs of asset – scrap value / est'd asset life). Switchover to SL is automatically made when the annual depreciation using the declining balance method becomes less than the annual depreciation using the straight line method.
- SY - Sum of the years digits method. This method is another form of accelerated depreciation. The annual depreciation is calculated by subtracting salvage value from original cost, and multiplying this figure by a fractional rate of depreciation. The denominator of the fraction is the sum of the years of useful life; for a life of 5 years, the denominator is = 1 + 2 + 3 + 4 + 5 = 15. The numerator is the year in reverse order. For the first year, the numerator is 5 and the fraction is 5/15.
Convention: The depreciation convention used to calculate the first month's or year's depreciation amount.
Life/Period: The number of years to depreciate the asset.
Please consult your CPA for the correct method, convention, and life for each of your depreciable assets.
Addl Dep%: Some tax laws may allow you to take an additional depreciation amount in the first year of asset ownership. If so, enter that percentage here
Asset Cost: The purchase cost of the asset
Salvage: The salvage value of the asset
Addl Dep: Any additional depreciation taken in the first year
Depr Basis: The current depreciation basis; current value minus salvage value (This field is automatically calculated by the system)
Previous: The previous year's total depreciation
Current: The current year's total depreciation
Posted Thru: The period/year the depreciation has been posted through in the GL
Dep Exp Acct: The depreciation expense account in the GL
Accm Dep Acct: The accumulated depreciation account in the GL
