Depreciation - Worked Example

This example illustrates how the field values are used in the depreciation calculation and how they update as the asset depreciates.

An asset is added to Asset Register with a Purchase Value of $1000, and Commission Date of 01-01-2010. These fields are set and do not change through the life of the asset:

Acquisition value (START_VALUE) = $1000
Commission date (COM_DATE) = 01/01/2010

Most of the key fields used in the depreciation calculation appear on the Asset Details screen:

Property	Field	Notes
Commission Date	COM_DATE	Date that Exo Business starts to depreciate from.
Purchase Value	START_VALUE	Acquisition value. Basis of straight-line depreciation.
Opening Val (Book)	YR1_BOOKVAL or START_VALUE, if you haven’t done Year End Rollover.	Opening Net Book Value (NBV) for current year.
Current Year (Book)	Opening Val – Dep Value. Not from a field.	Current year’s movement (mainly depreciation).
Dep Value (Book)	DEPVALUE	Current Net Book Value.
Last Dep Date	DEP_DATE	Date that the asset is depreciated to, i.e. Current NBV is current to this date.

Notes

Also needed, but not seen on this screen, is CURRENT_YR_DEP_START_BOOK. This holds the commission date if the asset has not yet gone through a year-end roll, otherwise it holds the date of the last year-end rollover.
All field values are held in the ASSET_REG table.
The term Net Book Value (NBV) is defined as the Asset’s Cost (Acquisition Value) less Accumulated Depreciation.
The example is only dealing with Book/Accounting Depreciation.
In this example we depreciate every quarter, and year-end is 30th June.

This table shows how the fields are modified after each depreciation run and year-end roll. To understand how Fixed Assets calculates these values, refer to Depreciation Algorithms, which includes an example showing how the Depreciate to 31/03/2011 line is calculated.

Event	DEPVALUE	DEP_DATE	YR1_BOOKVAL	YR2_BOOKVAL	CURRENT_YR _DEP_START _BOOK	Depreciation charged to GL
After the asset addition	1000.00				01/01/2010
Depreciate to 31/03/2010	950.68	31/03/2010			01/01/2010	49.32
Depreciate to 30/06/2010	900.82	30/06/2010			01/01/2010	49.86
Year-End Rollover 30/06/2010	900.82	30/06/2010	900.82		30/06/2010
Depreciate to 30/09/2010	850.41	30/09/2010	900.82		30/06/2010	50.41
Depreciate to 30/12/2010	800.00	30/12/2010	900.82		30/06/2010	50.41
Depreciate to 31/03/2011	750.68	31/03/2011	900.82		30/06/2010	49.32
Depreciate to 30/06/2011	700.82	30/06/2011	900.82		30/06/2010	49.86
Year-End Rollover 30/06/2011	700.82	30/06/2011	700.82	900.82	30/06/2011
Depreciate to 30/09/2011	650.41	30/09/2011	700.82	900.82	30/06/2011	50.41

Depreciation charged to GL values are charged to the General Ledger as follows:

DR: Depreciation Expense (P&L)
CR: Accumulated Depreciation (BS)