Depreciation Methods

Form ID: (FA202500)

The depreciation method determines how the asset cost is allocated over the asset useful life. MYOB Acumatica provides multiple built-in depreciation methods, and you can also configure custom depreciation methods. On this form, you can create, delete, and edit the formula-based depreciation methods—that is, the depreciation methods that use formulas to calculate the depreciation during the entire useful life of an asset.

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Summary Area

In this area, you can enter information for a new depreciation method, or view or edit the information for an existing one.


Element	Description
Depreciation Method ID	The identifier of the depreciation method.
Calculation Method	The calculation method used by the selected depreciation method. The following options are available: Straight-Line, Declining-Balance, Declining Balance by Days in Period, Sum-of-the-Years'-Digits, Remaining Value, Dutch Method 1, Dutch Method 2, Remaining Value by Days in Period, Australian Prime Cost, and Australian Diminishing Value. These options are described in detail in Predefined Depreciation Methods.
Description	A brief description of the depreciation method.
DB Multiplier	The percentage of depreciation acceleration used by the Declining-Balance calculation method for calculating the depreciation rate, which, in turn, is required for calculating the depreciation expense per a year. Usually, the percent of depreciation acceleration is 125%, 150%, 175%, or 200%. For details, see Predefined Depreciation Methods. Note: The maximum value that can be entered in this box is 99,999.0000. For the Australian and New Zealand depreciation methods, this box is unavailable and the value is set automatically to 0.0000. To specify the percentage of depreciation acceleration, use the Percent per Year box on the current form.
Switch to SL	A check box that you select to direct the system to switch from the Declining-Balance calculation method to the Straight-Line method when the depreciation amount calculated by using the Straight-Line method is greater than the depreciation amount calculated for the Declining-Balance method. For the Australian and New Zealand depreciation methods, this check box is cleared and unavailable. For details, see Australian Depreciation Methods and New Zealand Depreciation Methods.
Percent per Year	The percent of fixed asset depreciation for each year. This value is used to calculate depreciation if either of the following criteria is met: The Dutch Method 2 calculation method is selected, and the Yearly Accountancy check box. The Australian Prime Cost or Australian Diminishing Value method is selected.
Source	The source of the selected depreciation method. The following options are available: Predefined: A depreciation method predefined by the system. The settings of this method cannot be edited by a user. Custom: A depreciation method configured by a user.
Averaging Convention	The way fixed assets will be depreciated for the period within which the asset was acquired or disposed. You should select an averaging convention depending on the depreciation method you specified. The following options, described more fully in Averaging Conventions, are available: Full Period, Mid Period, Next Period, Modified Half Period, Modified Half Period 2, Full Quarter, Mid Quarter, Full Year, Mid Year, and Full Day. For the Australian depreciation methods, this box displays Full Day and is unavailable. For details, see Australian Depreciation Methods. For the New Zealand depreciation methods, this box displays Full Period and is unavailable. For details, see New Zealand Depreciation Methods.
Yearly Accountancy	A check box that you select to direct the system to calculate the depreciation amount on a yearly basis. That is, the system uses the formula specific for the selected calculation method to calculate the depreciation expenses for each year. Then the system spreads this depreciation amount over the financial periods in a year (for example, months) by dividing this amount by the number of periods. With this check box cleared (the default value), the system calculates the deprecation amount for each period (not the whole year) by using the formula specific for the selected calculation method. This setting is applicable to only depreciation methods based on the Declining-Balance calculation method. For details on calculating depreciation with this check box selected and cleared, see Examples of Calculating Depreciation Expenses for Declining Balance. For the Australian depreciation methods, this check box is cleared and unavailable. For details, see Australian Depreciation Methods. For the New Zealand depreciation methods, this check box is hidden. For details, see New Zealand Depreciation Methods.