About Partial Depreciation
CloudSuite Industrial provides seven standard and user-defined depreciation methods. The user-defined methods have different depreciation rates based on year. For example, if Number of Periods is set to 12 for a year and it has 36 units to depreciate, the custom rate is:
| Year | Rate % |
|---|---|
| 1 | 30 |
| 2 | 50 |
| 3 | 20 |
The asset detail is:
| Asset Name | AS_1 |
|---|---|
| Start to Depr Date | Apr 2012 |
| Cost | 7200 |
| # Units to Depr | 36 (12 Periods * 3 Years) |
It will depreciate for twelve periods for a single year from the start date.
| Date | Units to depreciate | Rate % | Period Depreciation |
|---|---|---|---|
| 04/2012 - 03/2013 | 12 | 30 | 180 = 7200 * 30% / 12 |
| 04/2013 - 03/2014 | 12 | 50 | 300 = 7200 * 50% / 12 |
| 04/2014 - 03/2015 | 12 | 20 | 120 = 7200 * 20% / 12 |
For partial depreciation, when an asset is placed in service at some time in the year, part of the full-year depreciation is required in the first year, while the remaining balance is deducted in the final year of the depreciation. The year for partial has three types:
- Calendar Year: Period from January 1 to December 31. It depreciates starting on the date it is placed in service to December 31.
- Fiscal Year: Period used for calculating annual financial statements in businesses. It depreciates from the date is placed in service date to the end of the fiscal year. The US fiscal year is October 1 to September 30.
- None: No partial depreciation is taken.
For example, below is a three year property partial depreciation rate:
| Year | Rate % |
|---|---|
| 1 | 30 |
| 2 | 40 |
| 3 | 20 |
| 4 | 10 |
For the calendar year, depreciation rates would be as follows:
| Date | Units to depreciate | Rate % | Period Depreciation |
|---|---|---|---|
| 04/2012 - 12/2012 | 9 | 30 | 240 = 7200 * 30% / 9 |
| 01/2013 - 12/2013 | 12 | 40 | 240 = 7200 * 40% / 12 |
| 01/2014 - 12/2014 | 12 | 20 | 120 = 7200 *20% / 12 |
| 01/2015 - 03/2015 | 3 | 10 | 240 = 7200 * 10% / 3 |
For the fiscal year, depreciation would be as follows:
| Date | Units to depreciate | Rate % | Period Depreciation |
|---|---|---|---|
| 04/2012 - 09/2012 | 6 | 30 | 360 = 7200 * 30% / 6 |
| 10/2012 - 09/2013 | 12 | 40 | 240 = 7200 * 40% / 12 |
| 10/2013 - 09/2014 | 12 | 20 | 120 = 7200 * 20% / 12 |
| 10/2015 - 03/2016 | 6 | 10 | 120 = 7200 * 10% / 6 |
Follow the steps in Generating a Depreciation Schedule to set up a fixed asset depreciation.
Using Dates in the Past
You can specify any date as the date to start depreciation. If you specify a date in the past, depreciation will start from that month.
For posting to Fiscal Periods, you can specify a transaction date when posting. This date is used to determine Fiscal Periods. If you specify a date in the past, depreciation is calculated for all previous months.
Using a Date in the Middle of the Month
If you start depreciation in the middle of the month, depreciation will start from the first of that month. There is no partial month depreciation.