CALCULATE DEPRECIATION

Several system and depreciation method-specific options affect the computation of depreciation. You should make the decisions regarding the basic methodology used at your company and the system configuration(s) that support your company policies before you initialize Fixed Assets. Configuration changes made after initialization, although permitted by the system, should be made with caution to avoid unexpected results.

Select System-Wide Method for Computing Depreciation

On the Configure Fixed Assets Settings screen, you can select one of two system-wide methods for computing depreciation "Catch-Up" amounts for prior periods missed in a current year (purchase year or fiscal year, as applicable). You can:

These two system options are available for use regardless of the basis that you assign to a depreciation method (Date of Purchase or Fiscal Year). The default configuration for these options is to spread the "Catch-Up" amount among the remaining periods.

Use of "Catch-Up" System-Wide Configuration for Depr Calculations

On the Configure Fixed Assets Settings screen, you can specify whether the system should "catch up" the calculation of any delayed current year depreciation in the remaining periods of the purchase or fiscal year (as applicable with your depreciation methods) or in the current period.

Regardless of your selection, this configuration option is NOT designed for historical "catch-up" calculations during the initialization of your asset records. It is designed to help you on an ongoing basis for new records, in cases when you were not able to begin depreciation at the proper time in the current fiscal year or purchase year.

"Catch-Up" depreciation calculations in the current depreciation year (Purchase Year or Fiscal Year) will correctly compute the current depreciation amount on a "catch-up" basis in the current accounting period, based on the Depr Start Date entered for the Asset Master record. For new records, the system will automatically increment the value in the Days/Pds Remaining field on a "catch-up" basis when depreciation is first calculated for the record.

Your current accounting period is April, and the asset record should have been added two periods ago in February. If you use the "catch-up" configuration add option, you should initialize the Depr Start Date with the date in the February period when depreciation should have begun. (If you are using no other methodology, we recommend using the first day of the current accounting period.) When you compute depreciation for the first time for this record, the system will insert the correct data in the Current Depr Yr and Days/Pds Remaining fields, just as if the asset had been added correctly in February, but effective as of the current period. For this example, the system will compute the amount of depreciation for February, March, and April (the current period) and will display the three-month total in the Current Pd Depreciation field. In this manner, the system will "catch up" previously missed amounts beginning with the period associated with the Depr Start Date in the current year (Purchase Year or Fiscal Year) through the current period, all at once, in the current accounting period. The system will compute depreciation only for a single period the next accounting period, because the record has already been "caught up" and is back on track.

If you find that the "catch-up" depreciation amount is an unexpectedly large amount, you can always override the system-wide "catch-up" calculation on an asset-by-asset basis so that the missed periods are spread over the remaining periods in the purchase year or fiscal year.

Your current accounting period is April, and the asset record should have been added two periods ago in February. If you use the "catch-up" configuration spread option, you should still initialize the Depr Start Date with the date in the February period when depreciation should have begun. When you compute depreciation for the first time for this record, however, the system will still insert the correct data in the Current Depr Yr and Days/Pds Remaining fields as of February, just as if the asset had been added correctly in February. For this example, however, when you compute depreciation, the system will evenly spread the missed depreciation amounts for February and March among the remaining periods in the purchase year or fiscal year and will display this amount in the Current Pd Depreciation field.

The system default for this configuration option is to spread missed depreciation among remaining periods in the current Purchase Year or Fiscal Year, as applicable; this option is the most conservative depreciation expense for the remainder of the year.

Make changes to configuration options after initialization with extreme caution. If you change this option once you have begun computing and posting depreciation, the system will compute annual depreciation correctly, but the spread of the total annual depreciation may be affected, however, and extensive editing of the individual asset records may also be required.

Set Configuration for Computing Depreciation Based on Periods or Days for Date of Purchase Methods

On the Configure Fixed Assets Settings screen, you can select one of two system methods for computing current period depreciation. You can:

When you establish each depreciation method on the Manage Depreciation Methods screen, you must specify whether the method uses the Date of Purchase or Fiscal Year basis. If you have specified a Date of Purchase basis depreciation method for use in any book in an Asset Master record, you must ALSO specify the system configuration to use during calculations.

YOU SHOULD DECIDE ON THE CONFIGURATION FOR USE AT YOUR COMPANY BEFORE INITIALIZATION. If you change the configuration after depreciation has been computed, subsequent depreciation calculations will be incorrect. In this circumstance, to ensure that future calculations will be correct after changing this configuration, you may need to manually edit the Days/Pds Remaining field for EACH affected asset master record.

The two system configuration options for the calculation of Date of Purchase basis current period depreciation are based on:

If you select this option, the system will spread annual depreciation evenly throughout the purchase year, based on whether or not you have selected the Number of periods in purchase year option. Unless you have made changes to key fields used in the computation, this option will compute consistent current period depreciation values from period-to-period across the purchase year among periods that may contain inconsistent numbers of days.

Almost all users select this option, which is simpler to administer and maintain.

If you select this option, the system will compute current period depreciation based on the actual number of days in the current period. This option will compute varying current period depreciation values from period-to-period across the purchase year, depending on the number of days in each "current period." (For this configuration, the system uses a standard value of 365 days in a year (366 for a leap year) for calculations.)

Few users select this option, which is far more time-consuming to administer and maintain.

The default configuration for these options is to compute depreciation evenly based on the number of periods in a purchase year. (Most companies use the default configuration.) You can change the default configuration so that depreciation is based on the actual number of days "owned" in each period, but any such change should always be made before initialization.

Set Up Fiscal Year/Period/Subperiod Data in Costpoint General Ledger and Fiscal Year/Accounting Period Data in Costpoint Fixed Assets

Costpoint General Ledger: Fiscal Years, Accounting Periods, and Subperiods

Regardless of the Date of Purchase or Fiscal Year basis assigned to any depreciation method, you must set up all Fiscal Year/Period/Subperiod data in Costpoint General Ledger for at least the current fiscal year. You should, at a minimum, enter data for the current fiscal year and data for the next two future fiscal years in Costpoint Fixed Assets to enable current period depreciation expense calculations. In addition, for assets having a depreciation method based on Date of Purchase, historical fiscal years and periods should be set up in Costpoint Fixed Assets back to the earliest Depreciation Start Date of assets that are still depreciating. (Setting up historical Fixed Assets Years and Periods is important for other reasons as well. The historical years and periods are used for many Fixed Assets reports that provide asset cost and accumulated details going back to the Acquisition Fiscal year and Period of asset records.)

During the Fixed Assets posting process, the system always validates data on the Configure Posting Settings screen against the Fiscal Year/Period/Subperiod General Ledger data.

Costpoint Fixed Assets: Fiscal Years and Accounting Periods

The system uses data from these screens to compute depreciation expense for the current accounting period and for future accounting periods. The Compute/Update Depreciation Computation Data utility also uses data from these screens to compute values for the Current Depr Yr and Days/Pds Remaining fields in the Asset Master records. (During the Fixed Assets posting process, however, the system always validates data on the Configure Posting Settings screen against Fiscal Year/Period/Subperiod data in the General Ledger.)

The system uses future fiscal year/period data for both current and future period depreciation calculations.

If you also enter historical fiscal year/period data in these screens, you can use the Compute/Update Depreciation Computation Data utility to verify (and optionally update) the Current Depr Yr and Days/Pds Remaining fields of your historical assets based on the Depr Start Date. Regardless of the Date of Purchase or Fiscal Year basis assigned to any depreciation method, you should, at a minimum, enter data for the current fiscal year and data for the next two future fiscal years in Costpoint Fixed Assets to enable current period depreciation expense calculations.

To use the projections functionality, you should add fiscal year/accounting period data for each future year for which you will compute projected depreciation expense.

You can manually enter this data on the Manage Fixed Assets Fiscal Years screen and the Manage Fixed Assets Accounting Periods screen. Alternately, you can use the optional Update FA FY/Pd Information from GL FY/Pd Information process to automatically populate these screens with fiscal year/accounting period data already existing in Costpoint General Ledger.

It is likely, however, that you will have only the current fiscal year and accounting periods established in Costpoint General Ledger. In this event, you should manually enter data for the next two future fiscal years on the Manage Fixed Assets Fiscal Years screen and the Manage Fixed Assets Accounting Periods screen. When data for the fiscal year and accounting periods are set up in Costpoint General Ledger (after it has been established in Costpoint Fixed Assets), make sure that you review the parallel data in Fixed Assets to ensure that there are no discrepancies.

Regardless of the basis for depreciation (Date of Purchase or Fiscal Year) linked with the depreciation methods used at your company, you must set up Fixed Assets Fiscal Year/Period data as part of your initialization procedure before you compute depreciation for the first time. (This step is required even if you use only Date of Purchase basis depreciation methods at your company.)

If you do not establish the Fixed Assets Fiscal Year/Period data before computing depreciation, incorrect data will display in the Current Pd Depreciation fields(s) of the G/L Book Info tab and Other Books Info subtask of the Manage Asset Master Information screen (and on the Manage Asset General Ledger Book Information and Manage Asset Other Books Information screens) after depreciation is computed for new records.

In addition, blanks will display in the report produced by running the Compute/Update Depreciation Computation Data utility (in the Current Depr Yr and Days/Pds Remaining fields) for any record for which no corresponding Fiscal Year/Period data is found relative to the Depr Start Date field.

Further, assets with Acquisition Fiscal Years/Periods for which no corresponding Fiscal Year/period data is found in Fixed Assets will not appear in Fixed Assets reports that are run with parameters including the Fiscal Year and Period, since the reports will not be able to determine when the assets were added to your system.

Assign Date of Purchase or Fiscal Year Basis to Each Depreciation Method

You must assign a Date of Purchase or Fiscal Year basis for each depreciation method that you set up. The basis that you select for the depreciation method determines the specific formula that will be used to compute depreciation. Note that different formulas may be used within the same asset record, because depreciation methods are assigned on a book-by-book basis for each asset record.

It is important that you decide on the BASIS for the depreciation methods that you assign to your Asset Master records BEFORE you compute depreciation for the first time. If you assign a different depreciation method that has a different basis to a record AFTER depreciation has begun, you will need to manually edit Asset Master fields on a record-by-record basis before computations will proceed correctly.

The default configuration automatically associated with each depreciation method is the "Date of Purchase" basis. You can change the configuration to a "Fiscal Year" basis on the Manage Depreciation Methods screen, as desired. Once you have established the configuration and begun depreciating in the system, however, you cannot automatically change the depreciation method basis or assign a different depreciation method to an asset record without reviewing the need for manual edits on a record-by-record basis.

Other Factors that Can Affect Depreciation Calculations

Data Entered for Depreciation Method

Data entered for the depreciation method assigned to any book of an Asset Master record can also influence the calculation of depreciation. These factors can include data from the following fields on the Manage Depreciation Methods screen:

Data Entered in Asset Master Record

Data entered in an Asset Master record can also influence the calculation of depreciation. These factors can include data from the following fields, as applicable:

From the Manage Asset Master Information screen (and on the Manage Asset Description Information screen):

From G/L Book Info tab and Other Books Info subtask of the Manage Asset Master Information screen (and on the Manage Asset General Ledger Book Information and Manage Asset Other Books Information screens):

This list below contains field names as they appear on the Manage Asset Master Information screen. Field names may vary between screens.

Rounding

You may find occasional minor rounding differences (a few cents) in depreciation amounts calculated, even in methodology designed to be consistent from period-to-period.

Due to rounding differences, the system may need to add or deduct a few pennies from the depreciation expense calculated for the last period in each depreciation year (purchase year or fiscal year, as applicable). This procedure ensures that the sum of the depreciation expense calculated for the periods within a depreciation year exactly equals the annual depreciation.

Current Depr Yr and Days/Pds Remaining Fields

These two important fields on the G/L Book Info tab (and the Other Books Info subtask, as applicable) of the Manage Asset Master Information screen (and on the Manage Asset General Ledger Book Information and Manage Asset Other Books Information screens) are used by the system during depreciation computations.

For new records, leave these fields blank so the system can automatically drop in the correct values during the first depreciation calculation. The values inserted by the system into these fields are based on data in the Depr Start Date field, as well as the configuration option selected for depreciation calculations on the Configure Fixed Assets Settings screen ("catch-up" calculations added to the current period amount or spread among the remaining periods in the Purchase Year or Fiscal Year). If you use Date of Purchase basis depreciation methods based on periods, the system will also read the Pds in DP Year field on the Manage Fixed Assets Fiscal Years screen to determine how many periods should be inserted into the Days/Pds Remaining field at the start of each new purchase year.

For existing records that already have depreciation history (that are not being depreciated for the first time in Costpoint), you must initialize these fields correctly to ensure that ongoing depreciation calculations are correct.

Current Depr Yr

The value in this field signifies which depreciation year of the asset's total useful life is current. With this data, the system can use the appropriate percentage for the current year of life from the depreciation method linked with this record. (Years of useful life and percentages for each year are set up on the Manage Depreciation Methods screen.)

The Useful Life field(s) on the G/L Book Info tab (and the Other Books Info subtask, as applicable) of the Manage Asset Master Information screen (and on the Manage Asset General Ledger Book Information and Manage Asset Other Books Information screens) are optional data fields ONLY, and are NOT used to calculate depreciation.

For new records, this field is blank. You should not normally enter a value in this field for new records. When depreciation is calculated for the first time, the system will automatically insert 1 in this field, because all new records are in the first year of depreciation upon initialization.

If you have entered any value in this field, the system will NOT replace your entry when calculating depreciation.

When you initialize your historical records, you will need to enter the correct current depreciation year for each asset. If, for example, you have an asset for which you have defined a depreciation method with a useful life of five years (on the Manage Depreciation Methods screen), you should enter the current year of that life (for example, 1, 2, 3, 4, or 5.). In this way, the proper depreciation percentage for the current depreciation year will be used during system depreciation calculations.

For both new and historical records, once this field is initialized (either by the system or manually), the system automatically increments the value in the Current Depr Yr field at the appropriate time for each record (within the limits of the useful life defined in the assigned depreciation method). The field is incremented, as appropriate, during the Close Fixed Assets Accounting Period process in Costpoint Fixed Assets.

During the Close Fixed Assets Accounting Period process, the system compares the value in the Current Depr Yr field with the last year of useful life from the depreciation method code attached to the Asset Master record. If there is a match AND the value in the Days/Pds Remaining field is equal to 1, the system does NOT increment the value in the Current Depr Yr field, but instead changes it to 0 (along with the value in the Days/Pds Remaining field). This condition signifies that the asset has reached the end of its useful life as defined in its depreciation method.

The value in the Current Depr Yr field will automatically increment at the appropriate time ONLY IF the value in the Days/Pds Remaining field is equal to 1 (for depreciation based on periods) or is less than or equal to the number of days in the period being closed (for Date of Purchase depreciation based on days) and the value in the Current Depr Yr field is less than the useful life specified in the depreciation method. (During the Close Fixed Assets Accounting Period process in Fixed Assets, the value in the Days/Pds Remaining field will also change appropriately and automatically.)

This field is critical to the calculation of depreciation. Although you can edit the Current Depr Yr field at any time, you should use caution if you change the current depreciation year for records once they have begun depreciating in the system.

Days/Pds Remaining

The value in this field indicates the number of periods or days remaining (as appropriate) in the current year of the asset's useful life. The system uses this value, among others, in the computation of depreciation.

Depending on the system-wide configuration decisions made for your company on the Configure Fixed Assets Settings screen and whether the depreciation method assigned to each asset record uses the Date of Purchase or Fiscal Year basis, the value that displays in this field will be different:

If you use Date of Purchase basis depreciation methods based on periods, the system also reads the Pds in DP Year column on the Manage Fixed Assets Fiscal Years screen to determine how many periods should be inserted into the Days/Pds Remaining field at the start of each new purchase year.

For new records, blanks display in this field. You should not enter a value in this field for new records. When depreciation is calculated for the first time, the system will automatically insert the correct number of periods or days, as appropriate, in this field.

If you use Date of Purchase basis depreciation methods based on periods, the system will also read the Pds in DP Year column on the Manage Fixed Assets Fiscal Years screen to determine how many periods should be inserted into the Days/Pds Remaining field at the start of each new purchase year.

If you have entered any value in this field, the system will NOT replace your entry when calculating depreciation.

When you initialize your historical records, you will need to enter the correct number of periods or days, as appropriate, in the field. For both new and historical records, once this field is initialized (either by the system or manually), the system automatically decrements the value in the Days/Pds Remaining field during the Close Fixed Assets Accounting Period process.

The value in the Current Depr Yr field will automatically increment if the value in the Days/Pds Remaining field is equal to 1 (for depreciation based on periods) OR is less than or equal to the number of days in the period being closed (for Date of Purchase depreciation based on days) and the value in the Current Depr Yr field is less than the useful life specified in the depreciation method.

At the same time, the value in the Days/Pds Remaining field will reset to the number of periods or days in the next fiscal or purchase year, as appropriate.

This field is critical to the calculation of depreciation. Although you can edit the Days/Pds Remaining field at any time, you should use caution if you change the days/periods remaining for records once they have begun depreciating in the system.

For more detailed information on Date of Purchase and Fiscal Year depreciation calculations using different system configurations, please refer to the examples that follow in this special topic.

Compute/Update Depreciation Computation Data Utility

The Compute/Update Depreciation Computation Data utility was developed to assist you in verifying the relationship of the Depr Start Date field to the Current Depr Yr and Days/Pds Remaining fields. The relationship between these fields and the Depr Start Date is critical to the accurate calculation of depreciation.

All values computed by the system in this utility are based on the assumption that the value in the Depr Start Date field is correct. The system displays its own computation, based on the Depr Start Date value, for the Current Depr Yr and Days/Pds Remaining fields as well as existing data for these fields from the Asset Master record. The system will never overwrite any manually entered data already existing in the Current Depr Yr and Days/Pds Remaining fields unless you run the Update portion of the utility.

You can run this utility for one asset/item number, a range of asset/item numbers, or all asset/item numbers. The system prints a report by asset/item number and by book, based on the depreciation start date, that includes a side-by-side comparison of both the current values displayed in the Asset Master and the system-computed the values for the Current Depr Yr and Days/Pds Remaining fields, based on the data in the Depr Start Date field.

Although you can print this report for all selected records, you can also print the report for exceptions only, which may make discrepancies easier to identify. After the report has printed, you may decide to activate the option in this utility that applies the system-computed values to your asset records. The update portion of the process updates the existing data in the Current Depr Yr and Days/Pds Remaining fields in the Asset Master record by replacing your data and writing the system-computed values to these fields. Please refer to the specific documentation for this utility for additional operational information.

If you choose not to apply the system-computed values, you may need to manually adjust some values in the Current Depr Yr and Days/Pds Remaining fields or, in some cases, the Depr Start Date field, to ensure the accuracy of depreciation calculations.

Because the Update portion of this utility will overwrite your existing data with system-generated data, you should always carefully review and agree with the reported results on a record-by-record basis before performing the Update process. (Note that the Update process is similar to posting routines in that you must first print the report before you can proceed with the Update process.) Never run the Update process as a matter of routine unless you are in agreement with the system data field changes that will take place for each Asset Master record. As an additional safeguard, ensure that a timely data backup has been performed.

This utility is designed as a diagnostic tool rather than a sophisticated system program. Note that fully depreciated records will also print as exceptions in the report. If you have named your depreciation method codes logically, however, it should be easy to match your codes against depreciation start dates in order to eliminate these records from the valid exceptions.

Because fully depreciated records will also print as exceptions on the report, you may find that you do not want to apply all the system-computed values to your asset records. In this event, you can use the system-generated report to guide you in manually adjusting the values in the Current Depr Yr, Days/Pds Remaining, and/or, in some cases, the Depr Start Date fields.

Note, however, that if you have carefully reviewed and agree with the system-computed changes for assets that are NOT fully depreciated, there will be no harm in also updating the system-computed changes for fully depreciated assets.

Under normal circumstances, when an asset is fully depreciated and the last period of life for the asset is closed, the values in the Current Depr Yr and the Days/Pds Remaining fields automatically change to 0 and display as such in the G/L Book Info tab and Other Books Info subtask of the Manage Asset Master Information screen (and on the Manage Asset General Ledger Book Information and Manage Asset Other Books Information screens).

During the Close Fixed Assets Accounting Period process, the system compares the value in the Current Depr Yr field with the last year of useful life from the depreciation method code attached to the Asset Master record. If there is a match AND the value in the Days/Pds Remaining field is equal to 1, the system does NOT increment the value in the Current Depr Yr field, but instead changes it to 0 (along with the value in the Days/Pds Remaining field.) This condition signifies that the asset has reached the end of its useful life as defined in its depreciation method.

When you update a fully depreciated record with this utility, the Update process will replace the zeroes in these fields with system-computed values based on the Depr Start Date field. If there is no book value remaining, however, the system will never compute additional depreciation, regardless of the values in the Current Depr Yr and the Days/Pds Remaining fields.

You must print the Compute/Update Depreciation Computation Data Report before you can run the Update process. You can print the report for all selected records or for exceptions only. This report provides supporting detail to the Update process and should be retained as part of the system audit trail.

Although you must print the Compute/Update Depreciation Computation Data Report before you can run the Update process, you can also print the report without updating so that you can review the data first. If you exit from the selection screen or change your selections, however, you must print the report again before you can run the Update process.

You should run this utility to verify and/or update your data after you initialize your historical records, after you reconcile the detail Asset Account and Accumulated Depreciation Account values with your General Ledger, but before you compute depreciation for the first time.

After initialization, you may want to run this utility on a regular basis each period as part of your company's standard procedures, to confirm that your period additions have been initialized correctly. For this monthly process, you would normally expect to print only the Exceptions, and would not expect to run the Update action for this utility unless your review has made it clear that the records on the report would be corrected by running the process.

Note that the same validations and rules by which depreciation is computed are followed in this report. For example, any record in which the Auto Calculate Depreciation check box is not selected will not be included in the report, just as any such record will be skipped during depreciation calculations.

Compute/Update Amount Taken Purchase Year-To-Date

Use the Compute/Update Amount Taken Purchase Year-To-Date utility to verify the relationship of the value in the Amt Taken Purch YTD field against the values in the Current Depr Yr and Days/Pds Remaining fields. Initialization data in the Amt Taken Purch YTD field is critical to the accurate calculation of depreciation, as is the data in the Current Depr Yr and Days/Pds Remaining fields. Historical data entry in the Amt Taken Purch YTD field in Asset Master records is particularly prone to error due to misinterpretation of the system "rules" for this field and/or because of missing/inadequate historical data.

This utility will verify/update Asset Master data only for books in which the assigned depreciation method uses a Date of Purchase basis and whose depreciation start date is before the current Fixed Assets posting Fiscal Year, Period, and Subperiod. [For assets in the first period of a purchase year, the Amt Taken Purch YTD value will automatically display as zero].

The verify and update portions of this utility follow methodologies similar to those in the Compute/Update Depreciation Computation Data utility, except that this utility computes and compares values in the Amt Taken Purch YTD field in Asset Master records, instead of the Current Depr Yr and Days/Pds Remaining fields.

For new Asset Master records, the system will automatically initialize and update the values in the Amt Taken Purch YTD fields in Asset Master (provided you have not entered data in these fields) when you close the current accounting period.

For additional information, please refer to the specific documentation for the Amt Taken Purch YTD field for the G/L Book Info tab of the Manage Asset Master Information screen.

The Update process is similar to posting routines in that you must print the report before you can continue with the Update process. Never run the Update process as a matter of routine unless you are in agreement with the system field changes that will take place for each Asset Master record.

(Asset acquired at the beginning of the fiscal year using Fiscal Year basis.)

System-Wide Configuration: Spread "Catch-Up" among Remaining Periods in FY

FY:	Calendar Year (January to December)
New Asset:	Acquired January 2000
Cost:	$ 12,000
Depr Method:	S/L 5 (20% each year). Fiscal Year Basis
Annual Depr:	(Years 1 to 5) 12,000 * 20% = 2,400
Current FY/Pd:	FY 2000 Pd: 1
Depr Yr/Pds Remaining:	Depr YR:1 Pds Remaining: 12 (at time of initialization)

Basic Formula:

Annual Depr _______________________________________ # Pds Remaining in FY (Including Current Pd)						= Current Pd Depreciation
FY00 Pd1	(2,400	- 0)	=	2400 12	=	200.00
FY00 Pd2	(2,400	- 200)	=	2200 11	=	200.00
FY00 Pd3	(2,400	- 400)	=	2000 10	=	200.00
FY00 Pd4	(2,400	- 600)	=	1800 9	=	200.00
FY00 Pd5	(2,400	- 800)	=	1600 8	=	200.00
FY00 Pd6	(2,400	- 1000)	=	1400 7	=	200.00
FY00 Pd7	(2,400	- 1200	=	1200 6	=	200.00
FY00 Pd8	(2,400	- 1400	=	1000 5	=	200.00
FY00 Pd9	(2,400	- 1600	=	800 4	=	200.00
FY00 Pd10	(2,400	- 1800	=	600 3	=	200.00
FY00 Pd11	(2,400	- 2000	=	400 2	=	200.00
FY00 Pd12	(2,400	- 2200	=	200 1	=	200.00

(Asset acquired in the middle of the fiscal year using Fiscal Year basis.)

System-Wide Configuration: Spread "Catch-Up" among Remaining Periods in FY

FY:	Calendar Year (January to December)
New Asset:	Acquired July 2000
Cost:	$ 12,000
Depr Method:	S/L 5 (20% each year). Fiscal Year Basis
Annual Depr:	(Years 1 to 5) 12,000 * 20% = 2,400
Current FY/Pd:	FY: 2000 Pd: 7
Depr Yr/Pds Remaining:	Depr YR:1 Pds Remaining: 6 (at time of initialization)

Basic Formula:

Annual Depr _______________________________________ # Pds Remaining in FY (Including Current Pd)						= Current Pd Depreciation
FY00 Pd7	(2,400	- 0	=	2400 6	=	400.00
FY00 Pd8	(2,400	- 400	=	2000 5	=	400.00
FY00 Pd9	(2,400	- 800	=	1600 4	=	400.00
FY00 Pd10	(2,400	- 1200	=	1200 3	=	400.00
FY00 Pd11	(2,400	- 1600	=	800 2	=	400.00
FY00 Pd12	(2,400	- 2000	=	400 1	=	400.00

(Asset acquired in middle of fiscal year using Fiscal Year basis.)

System-Wide Configuration: Spread "Catch-Up" among Remaining Periods in FY

FY:	Calendar Year (January to December)
New Asset:	Acquired Nov 2000
Cost:	$ 12,000
Depr Method:	S/L 5 (20% each year). Fiscal Year Basis
Annual Depr:	(Years 1 to 5) 12,000 * 20% = 2,400
Current FY/Pd:	FY: 2000 Pd: 11
Depr Yr/Pds Remaining:	Depr Yr:1 Pds Remaining: 2 (at time of initialization)

Basic Formula:

Annual Depr

_______________________________________

# Pds Remaining in FY

(Including Current Pd)

= Current Pd Depreciation

FY00 Pd11

2,400

- 0

2400

1200.00

FY00 Pd12

2,400

- 1200

1200

1200.00

(Asset acquired at beginning of fiscal year using Fiscal Year basis. Record added in middle of FY with "Catch-up" spread over remaining periods.)

System-Wide Configuration: Spread "Catch-Up" among Remaining Periods in FY

FY:	Calendar Year (January to December)
New Asset:	Acquired January 2000
Cost:	$ 12,000
Depr Method:	S/L 5 (20% each year). Fiscal Year Basis
Annual Depr:	(Years 1 to 5) 12,000 * 20% = 2,400
Current FY/Pd:	FY: 2000 Pd: 8
Depr Yr/Pds Remaining:	Depr Yr:1 Pds Remaining: 5 (at time of initialization)

Basic Formula:

Annual Depr _______________________________________ # Pds Remaining in FY (Including Current Pd)						= Current Pd Depreciation
FY00 Pd8	(2,400	- 0)	=	2400 5	=	480.00
FY00 Pd9	(2,400	- 480)	=	1920 4	=	480.00
FY00 Pd10	(2,400	- 960)	=	1440 3	=	480.00
FY00 Pd11	(2,400	- 1440	=	960 2	=	480.00
FY00 Pd12	(2,400	- 1920	=	480 1	=	480.00

In this example, the annual depreciation of $ 2,400 is still expensed in the fiscal year. The annual depreciation, however, is spread over fewer periods in the fiscal year (five). If the depreciation for the asset had been properly entered when the asset was acquired in period 1, the annual depreciation would have instead have been spread over 12 periods.

Examples 1 to 4 each illustrate depreciation calculations using a Fiscal Year basis, with "Catch-Up" depreciation spread among the remaining periods in the fiscal year. Although this methodology is designed to produce consistent depreciation calculations from period-to-period, you may notice occasional minor rounding differences (a few cents) in one or more periods.

If you have configured the system to use the actual number of days per year or some other number that you specify, note that there is no change in the basic formula used to compute depreciation. There may, however, be period-by-period fluctuations in the computed depreciation amount, based on the fluctuating numbers of days per period.

(Asset acquired at the beginning of the fiscal year using a Fiscal Year basis. Record was added in the middle of the fiscal year with "Catch-up" applied in current period.)

System-Wide Configuration: "Catch-Up" in Current Period

FY:	Calendar Year (January to December)
New Asset:	Acquired January 2000
Cost:	$ 12,000
Depr Method:	S/L 5 (20% each year). Fiscal Year Basis
Annual Depr:	(Years 1 to 5) 12,000 * 20% = 2,400
Current FY/Pd:	FY: 2000 Pd: 8
Depr Yr/Pds Remaining:	Depr Yr:1 Pds Remaining: 5 (at time of initialization)

Basic Formula:

* Pds Elapsed in FY = (Total Pds in FY - Remaining Pds in FY) +1

User Forgets to Enter Asset From Periods 1-7; Enters Asset Period 8 for First Time

FY00 Pd8	(	8 12	* 2400	)	- 0	=	1600.00
FY00 Pd9	(	9 12	* 2400	)	- 1600	=	200.00
FY00 Pd10	(	10 12	* 2400	)	- 1800	=	200.00
FY00 Pd11	(	11 12	* 2400	)	- 2000	=	200.00
FY00 Pd12	(	12 12	* 2400	)	- 2200	=	200.00

Asset acquired in middle of purchase year (which falls in middle of fiscal year) using Date of Purchase basis. Date of Purchase method based on Periods.

System-Wide Configuration: Spread "Catch-Up" among Remaining Periods in Purchase Year

"Date of Purchase" Config:	Current Pd Depreciation Based on # Pds in Purchase Year (12)
FY:	Calendar Year (January to December)
New Asset:	Acquired July 2000
Current FY/Pd:	FY: 2000 Pd: 7
Depr Yr/Pds Remaining:	Depr Yr:1 Pds Remaining: 12 (at time of initialization)
Cost:	$ 12,000
Depr Method:	S/L 5 (20% each year),.Date of Purchase Basis
Annual Depr:	(Years 1 to 5) 12,000 * 20% = 2,400

Basic Formula:

Annual Depr - Purchase YTD Depr ____________________________ # Pds Remaining in Purchase Year		= Current Pd Depreciation
FY00 Pd 7: (Purchase Yr 1, Pd 1)	(2,400 - 0) 12	=	200.00
FY00 Pd8: (Purchase Yr 1, Pd 2)	(2,400 - 200) 11	=	200.00
FY00 Pd9: (Purchase Yr 1, Pd 3)	(2,400 - 400) 10	=	200.00
FY00 Pd10: (Purchase Yr 1, Pd 4)	(2,400 - 600) 9	=	200.00
FY00 Pd11: (Purchase Yr 1, Pd5)	(2,400 - 800) 8	=	200.00
FY00 Pd12: (Purchase Yr 1, Pd 6)	(2,400 - 1000) 7	=	200.00

Note: After sixth period in purchase year, purchase year crosses fiscal years.

FY01 Pd 1: (Purchase Yr 1, Pd 7)	(2,400 - 1200) 6	=	200.00
FY01 Pd 2: (Purchase Yr 1, Pd 8)	(2,400 - 1400) 5	=	200.00
FY01 Pd3: (Purchase Yr 1, Pd 9)	(2,400 - 1600) 4	=	200.00
FY01 Pd4: (Purchase Yr 1, Pd 10)	(2,400 - 1800) 3	=	200.00
FY01 Pd5: (Purchase Yr 1, Pd 11)	(2,400 - 2000) 2	=	200.00
FY01 Pd6: (Purchase Yr 1, Pd 12)	(2,400 - 2200) 1	=	200.00

End of Purchase Year 1 - Begin Purchase Year 2

FY01 Pd7: (Purchase Yr 2, Pd 1)

(2,400 - 0)

200.00

(Asset was acquired 10 periods into fiscal year using Date of Purchase basis. Date of Purchase method based on Periods. Asset was entered three periods "late" (after purchase) with "Catch-Up" depreciation applied in current period.)

System-Wide Configuration: "Catch-Up' in Current Period

"Date of Purchase" Config:	Current Pd Depreciation Based on # Pds in Purchase Year (12)
FY:	Calendar Year (January to December)
New Asset:	Acquired July 2000
Cost:	$ 12,000
Depr Method:	S/L 5 (20% each year),.Date of Purchase Basis
Annual Depr:	(Years 1 to 5) 12,000 * 20% = 2,400
Current FY/Pd:	FY: 2000 Pd: 10
Depr Yr/Pds Remaining:	Depr Yr:1 Pds Remaining: 9 (at time of initialization)

Basic Formula:

(Including Curr Pd)

(# Pds PYTD * Annual Deprec) - PYTD Depreciation

____________________________________________

# Pds in PY

(Including Curr Pd)

= Current Pd Depreciation

User Misses First Three Periods in Purchase Year

FY00 Pd 10 (PY1, Pd 1,2,3,4)	[(4/12) * 2400]	- 0.00	=	800.00
FY00 Pd 11 (PY1, Pd 5)	[(5/12) * 2400]	- 800.00	=	200.00
FY00 Pd 12 (PY1, Pd 6)	[(6/12) * 2400]	- 1000.00	=	200.00

After the sixth period in purchase year, purchase year crosses fiscal year.

FY01 Pd 1 (PY1, Pd 7)	[(7/12) * 2400]	- 1200.00	=	200.00
FY01 Pd 2 (PY1, Pd 8)	[(8/12) * 2400]	- 1400.00	=	200.00
FY01 Pd 3 (PY1, Pd 9)	[(9/12) * 2400]	- 1600.00	=	200.00

Asset acquired at beginning of accounting period in middle of fiscal year using Date of Purchase basis. Date of Purchase method based on Days.

System-Wide Configuration: Spread "Catch-Up' among Remaining Periods in Purchase Year

"Date of Purchase" Config:	(see below) Actual # Days in each Purchase Year Period
FY:	Calendar Year (January to December)
New Asset:	Acquired July 1, 2000
Cost:	$ 12,000
Depr Method:	S/L 5 (20% each year),.Date of Purchase Basis
Annual Depr:	(Years 1 to 5) 12,000 * 20% = 2,400
Current FY/Pd:	FY: 2000 Pd: 10
Depr Yr/Pds Remaining:	Depr Yr: 1 Days Remaining: 365 (at time of initialization)

Dates	No Days	FY	FY Pd
Jul 1 to Jul 31, 2000	31	00	7
Aug 1 to Aug 31, 2000	31	00	8
Sept 1 to Sept 30, 2000	30	00	9
Oct 1 to Oct 31, 2000	31	00	10
Nov 1 to Nov 30, 2000	30	00	11
Dec 1 to Dec 31, 2000	31	00	12
Jan 1 to Jan 31, 2001	31	01	1
Feb 1 to Feb 28, 2001	28	01	2
Mar 1 to Mar 31, 2001	31	01	3
Apr 1 to Apr 30, 2001	30	01	4
May 1 to May 31, 2001	31	01	5
Jun 1 to Jun 30, 2001	30	01	6
	365

End Of Purchase Year 1- Begin Purchase Year 2

Jul 1 to Jul 31, 2000	31	01	7
Aug 1 to Aug 31, 2001	31	01	8

and so on.

Basic Formula:

(Annual Depr - PYTD Depr) * # Days in Curr Pd # Days Remaining in PY (Including Current Pd)		= Current Pd Depreciation
FY00 Pd 7: (2,400.00 - 0.00) =	1795.06 * 31 273	=	203.84
FY00 Pd 8: (2,400.00 - 203.84 =	2196.16 * 31 334	=	203.84
FY00 Pd 9: (2,400.00 - 407.68) =	1992.32 * 30 303	=	197.26
FY00 Pd 10: (2,400 - 604.94) =	1795.06 * 31 273	=	203.83
FY00 Pd 11: (2,400.00 - 808.77) =	1591.23 * 30 242	=	197.26
FY00 Pd 12: (2,400.00 - 1006.03) =	1393.97 * 31 212	=	203.84
FY00 Pd 1: (2,400.00 - 1209.87) =	1190.13 *31 181	=	203.84
FY01 Pd 2: (2,400.00 - 1413.71) =	986.29 * 28 150	=	184.11
FY01 Pd 3: (2,400.00 - 1597.82 =	802.18 * 31 122	=	203.83
FY01 Pd 4: (2,400.00 - 1801.65) =	598.35 * 30 91	=	197.26
FY01 Pd 5: (2,400.00 - 1998.91) =	401.09 * 31 61	=	203.83
FY01 Pd 6: (2,400.00 - 2202.74) =	197.26 * 30 30	=	197.26

End Of Purchase Year 1 - Begin Purchase Year 2

FY01 Pd 7: (2,400.00 - 0.00) =

2400.00 * 31

365

203.84

FY01 Pd 8: (2,400.00 - 203.84) =

2196.16 * 31

334

203.84

...and so on.

In this example, the system-wide default configuration on the Configure Fixed Assets Settings screen has been used to "Catch-Up" any missed depreciation among the remaining periods of the purchase year. No periods are missed for this example, so there is no "Catch-Up" amount computed for any period.

The Date of Purchase configuration for this example has been changed from the default to use the actual number of days in each purchase year period. When this configuration option is selected, the Depr Start Date field on the G/L Book Info tab and Other Books Info subtask of the Manage Asset Master Information screen determines how many days will be used in the computation for the first period in the first purchase year. Because the Depr Start Date for this example is the first day of the period, the full number of days in the period was used to compute depreciation for the first purchase month.

Asset acquired in middle of accounting period using Date of Purchase basis. Date of Purchase method based on Days.

System-Wide Configuration: Spread "Catch-Up' among Remaining Periods in Purchase Year

"Date of Purchase" Config:	Actual # Days in each Purchase Year Period
FY:	Calendar Year (January to December)
New Asset:	Acquired July 1, 2000
Start Date:	July 15, 2000
Cost:	$ 12,000
Depr Method:	DDB2, Date of Purchase Basis
Annual Depr:	(Year 1) 12,000 * 75% = 9,000
	(Year 2) 12,000 * 25% = 3,000
Current FY/Pd:	FY: 2000 Pd: 07
Depr Yr/Days Remaining: (at time of initialization)	Depr Yr: 1 Days Remaining in PY: 365

In this example, the system-wide default configuration on the Configure Fixed Assets Settings screen has been used to "Catch-Up" any missed depreciation in the remaining periods of the purchase year. No periods are missed for this example, so there is no "Catch-Up" amount computed for any period.

The Date of Purchase configuration for this example has been changed from the default to use the actual number of days in each purchase year period. When this configuration option is selected, the Depr Start Date field on the G/L Book Info tab and Other Books Info subtask of the Manage Asset Master Information screen determines how many days will be used in the computation for the first accounting period in the first purchase year. Because the Depr Start Date for this example is the 15th day of the accounting period in the first purchase year, there are only 17 days "owned" (31 minus 14) for the first accounting period.

Dates	No Days	FY	FY Pd
Jul 15 - Jul 31, 2000	17	00	7
Aug 1 - Aug 31, 2000	31	00	8
Sep 1 - Sep 30, 2000	30	00	9
Oct 1 - Oct 31, 2000	31	00	10
Nov 1 - Nov 30, 2000	30	00	11
Dec 1 - Dec 31, 2000	31	00	12
Jan 1 - Jan 31, 2001	31	01	1
Feb 1 - Feb 28, 2001	28	01	2
Mar 1 - Mar 31, 2001	31	01	3
Apr 1 - Apr 30, 2001	30	01	4
May 1 - May 31, 2001	31	01	5
Jun 1 - Jun 30, 2001	30	01	6
Jul 1 - Jul 14, 2001	14	01	7
	365

14 days for FY01 Pd 7 are calculated using the Year 1 depreciation percentage, because this represents the number of days remaining in Purchase Year 1 that are "owned" by this accounting period. Purchase Year 1 begins July 15, 2000 and ends July 14, 2001.

End of Purchase Year 1- Begin Purchase Year 2

Seventeen days in FY01 Pd are calculated using the Year 2 depreciation percentage, because this represents the number of days in Purchase year 2 that are "owned" by this accounting period (FY 01, Period 7). Purchase Year 2 begins July 15, 2001 and ends July 14, 2002.

Aug 1 - Aug 31, 2001	31	01	8
Sep 1 - Sep 30, 2001	30	01	9
Oct 1 - Oct 31, 2001	31	01	10
Nov 1 - Nov 30, 2001	30	01	11
Dec 1 - Dec 31, 2001	31	01	12
Jan 1 - Jan 31, 2002	31	02	1
Feb 1 - Feb 28, 2002	28	02	2
Mar 1 - Mar 31, 2002	31	02	3
Apr 1 - Apr 30, 2002	30	02	4
May 1 - May 31,2002	31	02	5
Jun 1 - Jun 30, 2002	30	02	6
Jul 1 - Jul 14, 2002	14	02	7
	365

Basic Formula:

(Annual Depr - PYTD Depr) * # Days in Curr Pd # Days Remaining in PY (Including Current Pd)		= Current Pd Depreciation
FY00 Pd 7: (9,000.00 - 0.00) =	9,000.00 * 17 365	=	419.18
FY00 Pd 8: (9,000.00 - 419.18) =	8,580.82 * 31 348	=	764.38
FY00 Pd 9: (9,000.00 - 1,183.56) =	7,816.44 * 30 317	=	739.73
FY00 Pd 10: (9,000.00 - 1,923.29) =	7,076.71 * 31 287	=	764.38
FY00 Pd 11: (9,000.00 - 2,687.67 =	6,312.33 * 30 256	=	739.73
FY00 Pd 12: (9,000.00 - 3,427.40) =	5,572.60 * 31 226	=	764.38
FY01 Pd 1: (9,000.00 - 4,191.78) =	4,808.22 * 31 195	=	764.38
FY01 Pd 2: (9,000.00 - 4,953.16) =	4,043.84 *28 164	=	690.41
FY01 Pd 3: (9,000.00 - 5,646.57) =	3,353.43 * 31 136	=	764.38
FY01 Pd 4: (9,000.00 - 6,410.95) =	2,589.05 * 30 105	=	739.73
FY01 Pd 5: (9,000.00 - 7,150.68) =	1,849.32 *31 75	=	764.39
FY01 Pd 6: (9,000.00 - 7,915.07) =	1,084.93 * 30 44	=	739.72

For each year in the life of the asset, the accounting period in which the Depr Start Date anniversary falls affects the depreciation calculation. The system applies the previous depreciation year rate to the applicable number of days "owned" in the previous purchase year and applies the current depreciation year rate to the number of days "owned" in the current depreciation year. These two calculations are summed to derive the total depreciation for the current period.

1st 14 days (July 1, 2001 - July 14, 2001)

FY01 Pd 7: (9,000.00 - 8,654.79) =

345.21 * 14

345.21

Begin Purchase Year 2

Next 17 days (July 15, 2001 - July 31, 2001)

FY01 Pd 7: (3,000.00 - 0.00) =	3,000.00 * 17 365	=	139.73
PERIOD 7 TOTAL			484.94
FY01 Pd 8: (3,000.00 - 139.73) =	2,860.27 * 31 348	=	254.79
FY01 Pd 9: (3,000.00 - 394.52) =	2,605.48 * 30 317	=	246.58
FY01 Pd 10: (3,000.00 - 641.10) =	2,358.90 * 31 287	=	254.79
FY01 Pd 11: (3,000.00 - 895.89) =	2,104.11 * 30 256	=	246.58
FY01 Pd 12: (3,000.00 - 1,142.47) =	1,857.53 * 31 226	=	254.79
FY02 Pd 1: (3,000.00 - 1,397.26) =	1,602.74 * 31 195	=	254.79
FY02 Pd 2: (3,000.00 - 1,652.05) =	1,347.95 * 28 164	=	230.14
FY02 Pd 3: (3,000.00 - 1,882.19) =	1,117.81 * 31 136	=	254.79
FY02 Pd 4: (3,000.00 - 2,136.98) =	863.02 * 30 105	=	246.58
FY02 Pd 5: (3,000.00 - 2,383.56) =	616.44 * 31 75	=	254.80
FY02 Pd 6: (3,000.00 - 2,638.36) =	361.64 * 30 44	=	246.57

In this example, in which the Depr Start Date does not coincide with the beginning of an accounting period and a Date of Purchase configuration based on Days is selected, a residual number of days will always be left over when the "official" life (in terms of accounting periods) is complete.

In this example, there is a two-year life consisting of 24 accounting periods. In the 24th accounting period, however, there are still 14 residual days remaining that have not been depreciated.

If you should browse this Asset Master record at this time, the Current Depr Yr field will display "2" and the Pds/Days Remaining field will display "14." The system will not display a value in the Current Depr Yr field that is greater than the life of the asset, even though the residual depreciation extends into the next accounting period.

In this circumstance, the number of accounting periods over which the asset is depreciated is 25 rather than 24, to accommodate the prorated portion that was excluded from the first purchase period.

Residual Amount:

14 days (July 1, 2002 - July 14, 2002)

FY02 Pd 7: (3,000.00 - 2,884.93) =

115.07 * 14

115.07

Asset acquired in middle of accounting period using Date of Purchase basis. Record added several periods later, with "Catch-up" depreciation applied in the current accounting period. Date of Purchase method based on Days.

System-Wide Configuration: Spread "Catch-Up' among Remaining Periods in Purchase Year

"Date of Purchase" Config:	Actual # Days in each Purchase Year Period
FY:	Calendar Year (January to December)
New Asset:	Acquired July 1, 2000
Start Date:	July 1, 2000
Cost:	$ 12,000
Depr Method:	SL5 (20% each year), Date of Purchase Basis
Annual Depr:	(Year 1 to 5)) 12,000 * 20% = 2,400
Current FY/Pd:	FY: 2000 Pd: 10
Depr Yr/Days Remaining: (at time of initialization)	Depr Yr: 1 Days Remaining: 365

Dates	No Days	FY	FY Pd
July 1 to July 31, 2000	31	00	7
Aug 1 to Aug 31, 2000	31	00	8
Sept 1 to Sept 30, 2000	30	00	9
Oct 1 to Oct 31, 2000	31	00	10
Nov 1 to Nov 30, 2000	30	00	11
Dec 1 to Dec 31, 2000	31	00	12
Jan 1 to Jan 31, 2001	31	01	1
Feb 1 to Feb 28, 2001	28	01	2
Mar 1 to Mar 31, 2001	31	01	3
Apr 1 to Apr 30, 2001	30	01	4
May 1 to May 31, 2001	31	01	5
June 1 to June 30, 2001	30	01	6
July 1 to July 31, 2001	31	01	7

End Of Purchase Year 1 - Begin Purchase Year 2

Basic Formula:

(Including Current Pd)

[# Pds PYTD * Annual Depreciation] - PYTD Depr

Total Days in PY

(Including Current Pd)

= Current Pd Depreciation

User should have entered asset in FY00, accounting period 7 (first period in purchase year), but forgets to do so. User enters asset for first time in accounting period 10, having skipped first three periods of purchase year 1.

July 2000	31 Days
Aug 2000	30 Days
Sept 2000	31 Days
Oct 2000	31 Days
	123 Days Purchase YTD ( Including Current Period)

This calculation combines the "Catch-Up" computation for the three missed periods with the computation for the current period.

FY00 Pd 10	(123 * 2400) 365	- 0.00	=	808.77
FY00 Pd 11	(153 * 2400) 365	- 808.77	=	197.26
FY00 Pd 12	(184 * 2400) 365	- 1,006.03	=	203.83
FY01 Pd 1	(215 * 2400) 365	- 1,209.86	=	203.84
FY01 Pd 2	(243 * 2400) 365	- 1,413.70	=	184.11
FY01 Pd 3	(274 * 2400) 365	- 1,597.81	=	203.83
FY01 Pd 4	(304 * 2400) 365	- 1,801.64	=	197.26
FY01 Pd 5	(335 * 2400) 365	- 1,998.90	=	203.84
FY01 Pd 6	(365 * 2400) 365	- 2,202.74	=	197.26

End Of Purchase Year 1 - Begin Purchase Year 2

FY01 Pd 10

(31 * 2400)

365

- 0.00

203.84

FY01 Pd 11

(62 * 2400)

365

- 203.84

203.83

...and so on.