User Defined Depreciation

Data Source: PFWTAB

The User Defined Depreciation screen can be accessed from the Configuration Quick Links screen by clicking on the General tab from on the General Ledger list and selecting User Defined Depreciation from the drop down list.

The User Defined Depreciation screen allows you to create user defined depreciation schedules. Up to fifty different user defined methods can be set up. Each schedule can span up to 40 years, be declining balance or straight line and have its own purchase and disposal convention. User Defined Depreciation codes loaded onto the system are used as valid user defined depreciation codes within the fixed asset system. The User Defined Depreciation codes will appear on the Select Method screen, accessed by selecting the Search icon next to the Method field on the Fixed Asset Profile tab.

The following is a description of the fields that appear on the User Defined Depreciation screen:

Field Description
Method The code used to represent the depreciation method (a valid code is a number between 40 and 89).
Life The number of years to depreciate the asset.
Method Type

The method type used to calculate the depreciation on a fixed asset.

Straight Line: Takes the Depreciation BasisClosed The depreciation basis for an asset, calculated as: Original Cost - Non Depreciable portion + Adjustments - Salvage Amount - Section 179 amount. and divides it by the life in years to get the annual depreciation. Next, it subtracts the YTD depreciation and divides the resulting figure by the number of periods remaining in the fiscal year to get the period depreciation.

Declining Balance: A percentage calculates the yearly depreciation amount that is depreciated over a year. Each year starts over with the percentage applied against the amount not yet depreciated in prior years.

Note:  The system has a hard-coded depreciation threshold of $2.00, at which point the system automatically switches to a Straight Line depreciation method, regardless of whether the code assigned to the unit is supposed to be Declining Balance.
For example, if a unit has a Net Book Value (NBV) of $2.58 in the first month of the company's fiscal year, using a Declining Balance method of 45% would decrease the value of the unit to $1.42. The system recognizes this, and as such, changes the depreciation to Straight Line so that the unit only depreciates by .22 cents per month (thereby reducing the value of the unit to 0.00 after 12 months.)

Select the Need to add a new depreciation method? Click here to add link to add a new user defined depreciation schedule.

Move the cursor over a Method and select Edit from the pop-up menu to edit an existing user defined depreciation schedule.

Move the cursor over a Method and select Copy from the pop-up menu to copy an existing user defined depreciation schedule.

The following button allows you to complete your work on the User Defined Depreciation screen:

Button Function
Close Closes the User Defined Depreciation screen and returns to the Configuration Quick Links screen.