To Configure Formula-Based Depreciation Methods

On the Depreciation Methods (FA202500) form, you can configure a formula-based depreciation method by using any of the available depreciation calculation methods, which are described in detail in Predefined Depreciation Methods.

To Configure the Straight-Line Depreciation Method

1. Open the Depreciation Methods (FA202500) form.
2. In the Depreciation Method ID box, type the name of the new method.
3. In the Calculation Method box, select Straight-Line.
4. Optional: In the Description box, enter a useful description of the depreciation method that you are configuring. The description will make it easy to find this method in the list of available depreciation methods.
5. Optional: In the Averaging Convention box, select the convention that determines how fixed assets must be depreciated for the financial year within which they are acquired or disposed of. The following options 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 details, see Averaging Conventions.
6. Optional: Select the Yearly Accountancy check box to configure the system to calculate the depreciation amount on a yearly basis, so that the system will calculate the depreciation expense for a year and then divide this amount evenly by the number of periods in a year.
7. On the form toolbar, click Save.

To Configure the Declining-Balance Depreciation Method

1. Open the Depreciation Methods (FA202500) form.
2. In the Depreciation Method ID box, type the name of the new method.
3. In the Calculation Method box, select Declining-Balance.
4. Optional: In the Description box, enter a useful description of the depreciation method that you are configuring. The description will make it easy to find this method in the list of available depreciation methods.
5. In the DB Multiplier box, enter the value (that is, the percentage of depreciation acceleration that you have decided to use in this method). For details, see the description of the Declining-Balance calculation method available in Predefined Depreciation Methods.
6. Optional: Select the Switch to SL check box to configure the system to switch the calculation method to Straight-Line in order to depreciate an asset to zero or to its salvage value (if specified).
7. Optional: In the Averaging Convention box, select the convention that determines how fixed assets must be depreciated for the financial year within which they are acquired or disposed of. The following options are available: Full Period, Mid Year, Mid Quarter, and Full Day. For details, see Averaging Conventions.
8. Optional: Select the Yearly Accountancy check box to configure the system to calculate the depreciation amount on a yearly basis, so that the system will calculate the depreciation expense for a year and then divide this amount evenly by the number of periods in a year.
9. On the form toolbar, click Save.

To Configure the Sum-of-the-Years'-Digits Depreciation Method

1. Open the Depreciation Methods (FA202500) form.
2. In the Depreciation Method ID box, type the name of the new method.
3. In the Calculation Method box, select Sum-of-the-Years'-Digits.
4. Optional: In the Description box, enter a useful description of the depreciation method that you are configuring. The description will make it easy to find this method in the list of available depreciation methods.
5. Optional: In the Averaging Convention box, select the convention that determines how fixed assets must be depreciated for the financial year within which they are acquired or disposed of. The following options are available: Full Period and Full Day. For details, see Averaging Conventions.
6. Select the Yearly Accountancy check box to configure the system to calculate the depreciation amount on a yearly basis, so that the system will calculate the depreciation expense for a year and then divide this amount evenly by the number of periods in a year.
7. On the form toolbar, click Save.

To Configure the Remaining Value Depreciation Method

1. Open the Depreciation Methods (FA202500) form.
2. In the Depreciation Method ID box, type the name of the new method.
3. In the Calculation Method box, select Remaining Value.
4. Optional: In the Description box, enter a useful description of the depreciation method that you are configuring. The description will make it easy to find this method in the list of available depreciation methods.
5. Optional: In the Averaging Convention box, select the convention that determines how fixed assets must be depreciated for the financial year within which they are acquired or disposed of. The following options 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 details, see Averaging Conventions.
6. Optional: Select the Yearly Accountancy check box to configure the system to calculate the depreciation amount on a yearly basis, so that the system will calculate the depreciation expense for a year and then divide this amount evenly by the number of periods in a year.
7. On the form toolbar, click Save.

To Configure the Declining Balance by Days in Period Depreciation Method

1. Open the Depreciation Methods (FA202500) form.
2. In the Depreciation Method ID box, type the name of the new method.
3. In the Calculation Method box, select Declining Balance by Days in Period.
4. Optional: In the Description box, enter a useful description of the depreciation method that you are configuring. The description will make it easy to find this method in the list of available depreciation methods.
5. In the DB Multiplier box, enter the value (that is, the percentage of depreciation acceleration that you have decided to use in this method). For details, see the description of the Declining-Balance calculation method available in Predefined Depreciation Methods.
6. In the Averaging Convention box, select Full Day.
7. Optional: Select the Yearly Accountancy check box to configure the system to calculate the depreciation amount on a yearly basis, so that the system will calculate depreciation for each period of the year based on the net book value at the beginning of the year.
8. On the form toolbar, click Save.