How is depreciation calculated - Average Annual Value
Description of Issue
How is depreciation calculated when using a depreciation basis of Average Annual Value?
Context
Capital Assets
Cause
Informational
Resolution
- Remaining Depreciation principal = ((SOY value + Current book value) / 2) + LTD accumulated depreciation
- Please note that the SOY value used for the first year of depreciation will be $0.00 by design
- Use the Remaining depreciation principal from step 1 in the calculation for whichever depreciation method is set on your asset: Master Article - How is depreciation calculated
Additional Information
- Depreciation basis is specified on the subclass code
- Before depreciating for a new year, make sure assets have been fully processed for the prior year: Processing assets for year end close