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Example - DB1/SL Depreciation

A fixed asset has an acquisition cost of LCY 100,000. In the FA Depreciation Books window, the Declining-Balance % field contains 25 and the No. of Depreciation Years field contains 8. The Calculate Depreciation batch job is run biannually.

The FA 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

-12,500.00

87,500.00

12/31/00

Depreciation

180

-12,500.00

75,000.00

06/30/01

Depreciation

180

-9,375.00

65,625.00

12/31/01

Depreciation

180

-9,375.00

56,250.00

06/30/02

Depreciation

180

-7,031.25

49,218.75

12/31/02

Depreciation

180

-7,031.25

42,187.50

06/30/03

Depreciation

180

-5,273.44

36,914.06

12/31/03

Depreciation

180

-5,273.44

31,640.62

06/30/04

Depreciation

180

-3,955.08

27,685.54

12/31/04

Depreciation

180

-3,955.08

23,730.46

06/30/05

Depreciation

180

-3,955.08

19,775.38 SL

12/31/05

Depreciation

180

-3,955.08

15,820.30 SL

06/30/06

Depreciation

180

-3,955.08

11,865.22 SL

12/31/06

Depreciation

180

-3,955.07

7,910.15 SL

06/30/07

Depreciation

180

-3,955.08

3,955.07 SL

12/31/07

Depreciation

180

-3,955.07

0.00 SL

* Depreciation start date

"SL" after the book value means that the straight-line method has been used.

Calculation method:

1st year:

Declining-balance amount: 25% of 100,000 = 25,000=12,500+12,500

Straight-line amount = 100,000/8=12,500=6,250+6,250

The declining-balance amount is used because it is the greater amount.

6th year (2005):

Declining-balance amount: 25% of 23,730.46 = 4,943.85= 2,471.92+2,471.92

Straight-line amount = 23,730.46/3 = 7,910.15=3,995.07+3,995.08

The straight-line amount is used because it is the greater amount.

See Also

Other Resources

Calculate Depreciation
FA Depreciation Books