Depreciation Calculation Example 4
Asset acquired at beginning of fiscal year using Fiscal Year basis. Record added in middle of FY with "Catch-up" spread over remaining periods.
System-Wide Configuration: Spread "Catch-Up" among Remaining Periods in FY
| FY: | Calendar Year (January to December) |
| New Asset: | Acquired January 2000 |
| Cost: | $ 12,000 |
| Depr Method: | S/L 5 (20% each year). Fiscal Year Basis |
| Annual Depr: | (Years 1 to 5) 12,000 * 20% = 2,400 |
| Current FY/Pd: | FY: 2000 Pd: 8 |
| Depr Yr/Pds Remaining: | Depr Yr:1 Pds Remaining: 5 (at time of initialization) |
Basic Formula
| Annual Depr
_______________________________________ # Pds Remaining in FY (Including Current Pd) |
= Current Pd Depreciation | |||||
|---|---|---|---|---|---|---|
| FY00 Pd8 | (2,400 | - 0) | = | 2400
5 |
= | 480.00 |
| FY00 Pd9 | (2,400 | - 480) | = | 1920
4 |
= | 480.00 |
| FY00 Pd10 | (2,400 | - 960) | = | 1440
3 |
= | 480.00 |
| FY00 Pd11 | (2,400 | - 1440 | = | 960
2 |
= | 480.00 |
| FY00 Pd12 | (2,400 | - 1920 | = | 480
1 |
= | 480.00 |
In this example, the annual depreciation of $ 2,400 is still expensed in the fiscal year. The annual depreciation, however, is spread over fewer periods in the fiscal year (five). If the depreciation for the asset had been properly entered when the asset was acquired in period 1, the annual depreciation would have instead have been spread over 12 periods.
Examples 1 to 4 each illustrate depreciation calculations using a Fiscal Year basis, with "Catch-Up" depreciation spread among the remaining periods in the fiscal year. Although this methodology is designed to produce consistent depreciation calculations from period-to-period, you may notice occasional minor rounding differences (a few cents) in one or more periods.
If you have configured the system to use the actual number of days per year or some other number that you specify, note that there is no change in the basic formula used to compute depreciation. There may, however, be period-by-period fluctuations in the computed depreciation amount, based on the fluctuating numbers of days per period.