Example: Calculating Depreciation Using Minimum Rate, Accelerated Depreciation Rate and Activity-based Depreciation Rate

Let us continue with the previous example and beside applying a 20% annual depreciation set also a 10% accelerated depreciation rate. Set it in Depreciation Categories, and mark the assets in the Fixed Assets register to include in the depreciation report. It is calculated from revaluated cost (the same way as minimum depreciation) and is for sake of posting added to the calculated minimum depreciation.

Insert activity-based depreciation factor 0.5.

• To calculate the rate of activity-based depreciation you have to multiply minimum depreciation and activitiy-based depreciation factor (positive or negative value).
• Revaluated cost is used as the basis of calculation (just like calculating minimun depreciation).

Click report button to create a depreciation and revaluation report for year 2007:

It shows the amounts that were depreciated using various methods:

Calculation:

1. Minimum depreciation

    

2. Accelerated depreciation

    

3. Activity-based depreciation

    

Creating report (Posting | Report) displays summary depreciation values: minimum, accelerated and activity-based depreciation. Of course revaluation is also calculated from the above-mentioned depreciation types:

---