A fixed asset has an acquisition cost of LCY 100,000. The Declining-Balance % field is 25. The Calculate Depreciation batch job is run biannually. The fixed asset ledger entries look like this:
| Date | FA Posting Type | Days | Amount | Book Value |
|---|---|---|---|---|
01/01/00 | Acquisition Costs | * | 100,000.00 | 100,000.00 |
06/30/00 | Depreciation | 180 | -13,397.46 | 86,602.54 |
12/31/00 | Depreciation | 180 | -11,602.54 | 75,000.00 |
06/30/01 | Depreciation | 180 | -10,048.09 | 64,951.91 |
12/31/01 | Depreciation | 180 | -8,701.91 | 56,250.00 |
* Depreciation start date
Calculation Method:
- BV = Book value
- ND = Number of depreciation days
- DBP = Declining-balance percent
- P = DBP/100
- D = ND/360
The formula for calculating the depreciation amounts is:
DA = BV * (1 - (1 -P)D)
The depreciation values are:
| Date | Calculation |
|---|---|
06/30/00 | DA = 100,000.00 * (1 - (1 - 0.25 )0.5) = 13,397.46 |
12/31/00 | DA = 86,602.54 * (1 - (1 - 0.25)0.5) = 11,602.54 |
06/30/01 | DA = 75,000.00 * (1 - (1 - 0.25)0.5) = 10,048.09 |
12/31/01 | DA = 64,951.91 * (1 - (1 - 0.25)0.5) = 8,701.91 |
The calculation continues until the book value equals the final rounding amount or the salvage value that you entered.