Enter basic depreciation data for your equipment. Depreciation rates are calculated based on the information you enter.
See these topics:
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Understanding periodic depreciation and book value calculations
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Understanding periodic depreciation and book value calculations
Create multiple depreciation schedules for a single piece of equipment as necessary. For example, you need to create report depreciation information to GAAP and a state agency for a chiller. GAAP requires that you use the Straight Line method, but the state agency requires that you use the Double Declining Balance method. Create one depreciation schedule for the chiller using the GAAP type and Straight Line method and a second depreciation schedule using the state agency type and the double declining balance method.
If you update Starting Value, Rem. Useful Life, the unit of measure, or Residual Value, the depreciation values are automatically recalculated.
You can also manually recalculate depreciation values for all the equipment records
in an organization for which you have defined depreciation data by clicking the Recalculate Depreciation Details on the Fiscal Years page of the Organizations form.
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Select one of these options:.
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Equipment > Assets
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Equipment > Positions
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Equipment > Systems
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Select the asset, position, or system for which to enter depreciation data, and then click the Depreciation tab.
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Click Add Depreciation Type.
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Specify this information:
Depreciation Method - Select the depreciation method for the depreciation schedule.
Starting Value - Specify the starting value of the asset.
Rem. Useful Life - Specify the remaining useful life of the asset, and then select the unit of measure of the remaining useful life in the adjacent field. If you select Days or Months or as the unit of measure, you must specify the remaining useful life as a positive integer. If you select Weeks, Months, Quarters, or Years, you can specify the remaining useful life as a decimal.
If you select Weeks, Months, Quarters, or Years as the unit of measure, the remaining
useful life must be converted into number of days in order to calculate depreciation
expenses. Months can automatically be converted into the appropriate number of corresponding
days without performing any calculations. If you select Weeks, Quarters, or Years,
the unit of measure must be converted into days or months in order to determine the
corresponding number of days.
See these terms for more information:
Option
Description
Weeks
The remaining useful life must be converted into days. The number you specify is multiplied by 7 to determine the equivalent number of days, and then the result is rounded to the nearest positive integer. For example, .1 weeks multiplied by 7 equals .7 days, which is rounded to 1 day.
Quarters
The remaining useful life must be converted into months. The number you specified is multiplied by 3 to determine the number of months, and then rounded to the nearest positive integer. For example, .4 quarters multiplied by 3 equals 1.2 months, which is rounded to 2 months.
Years
The remaining useful life must be converted into months. The number you specify is multiplied by 12 to determine the number of months, and then rounded to the nearest positive integer. For example, .4 years multiplied by 12 equals 4.8 months, which is rounded to 5 months.
Relative Start - Specify the relative start for the amount of time between the commission date and when the depreciation event occurs.
UOM Relative Start - Specify the unit of measure (UOM) for the relative start date. For example, if Relative Start is set to 5 and the UOM Relative Start is set to years, then the depreciation event occurs five years after the commission date for the equipment.
Residual Value - Specify the estimated value of the asset at the end of its useful life.
Est. Lifetime Output - Specify the units of output you estimate the equipment will produce over its lifetime if you selected Units of Output as the Depreciation Method.
Depreciation Category - Select the depreciation category.
Depreciation Type - Select a depreciation type.
Depreciation types are linked to the DETP entity for which you must define your depreciation
type codes. Contact your system administrator for more information.
From Date - Specify the starting date to calculate deprecation.
Relative to Commission - If the depreciation type is Decrease Value, select this check box to make the Original Component Value field available.
This field can be used to calculate depreciation from the commission date to the from date of a component being removed from the asset that represents a significant portion of the total value of the asset. .
The fraction that the Original Component Value represents (Component Value divided by the Starting Value is calculated when Depreciation Category is Commission) and this fraction is multiplied by the Current Book Value. The Change Value field is updated to the fraction of the Current Book Value that the Original Component Value amount represents.
Change Value - Specify an amount by which to change the Starting Value of the asset if the Depreciation Category is Increase Value or Decrease Value.
Change Life - Specify an amount by which to change the Rem. Useful Life of the asset if the Depreciation Category is Increase Life or Decrease Life.
Change Estimated Lifetime Output - Specify an amount by which to change the Est. Lifetime Output of the asset if the Depreciation Category is Increase Estimated Lifetime Output or Decrease Estimated Lifetime Output.
Original Component Value - Specify the original component value.
The Original Component Value amount is depreciated from the Commission Date to the From Date using the defined depreciation method. The value of the Change Value field will be updated to the depreciated Original Component Value amount and the new Starting Value will be increased by the Change Value amount.
Notes - Specify additional detail about the depreciation of the equipment.
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Click Submit.