Depreciation [U0730]

Contents

• Formula Driven Depreciation
• Table Driven Depreciation
• Other Methods
• Add/Change Depreciation
• Delete Depreciation

Introduction

The Table Driven Depreciation module allows users to add, modify or delete depreciation values within LeasePak. The user defined lives and values will be calculated within LeasePak. This module works in conjunction with the Prorate Income module, a separately purchased module of LeasePak.

This update allows the user to enter additional lives coverage in whole years and allows the user the ability to delete unwanted lives coverage for formula driven depreciation methods and table driven depreciation methods, such as ADR Straight Line, ADR Double Declining Balance, ADR Sum of the Years' Digits and Modified Accelerated Cost Recovery System (MACRS) for both the Half-Year Convention and Mid-Quarter Convention.

Table driven depreciation calculations will be stored in the Table Driven Depreciation table (RTD) within LeasePak. Formula driven depreciation methods (SL05 etc.) occupy a single record in the table and will be displayed in the pull down 'HELP' menu. These formula type depreciation methods will continue to use calculated percentages.

Existing Depreciation Codes use the following four character naming convention:

• First Character is Alphabetic, from A to Z
• Second Character is Alphanumeric, either A to Z or 0 to 9
• Last two Characters are numeric from 01 to 99, for the life of depreciation
  
  Exception: 'H' and '1' to '4' are reserved for half-year and quarter convention.

Depreciation Codes

The Depreciation Codes Z001 to Z999 are reserved for the Straight Line depreciation method over 'x' number of months. The last three characters denote the number of months (i.e. the term), which the asset is depreciated. The processing for Z001 to Z999 is similar to other Straight Line depreciation methods (SL03, SL05, SL07) the terms being specified are in months instead of years.

Release v5.0a allows straight line methods for Book Depreciation only. In order to limit Book Depreciation to the straight line methods (SLxx and Zxxx) and prorate the book depreciation amount based on the book depreciation start date; the "Prorate Income, IDC/IDR, Depr (Y/N)" switch in Miscellaneous Customization [U0212] must be set to ‘Y’. LeasePak will perform the necessary edit checks to verify the Book Depreciation method in Add Asset [U0101 update, when the Prorate Income field is set to 'Y'.

Depreciation Codes Y001 to Y999 are reserved for the Straight Line Mid-month Convention depreciation methods over 'x' number of months. The last three characters denote the number of months (i.e. the term), which the asset is depreciated. The processing for Y001 to Y999 are similar to other Straight Line Half Year Convention depreciation methods like SH03, SH05, SH07 but the terms being specified are in months instead of years

• The mid-month convention normalizes the In-Service Date of assets to the midpoint of the month.
• Allowing a mid-month of depreciation in the first month the asset is placed in service.
• Assets placed in service in the first day and last day are allowed the same amount of depreciation (half-month).
• For each following month of the recovery period, a full month's of depreciation is allowed.
• If the asset is held for the entire recovery period, a half-month of depreciation is allowed for the month following the end of recovery period (e.g. the 39th month of the 38-month property).
• For early payoff, only a half-month of depreciation will be calculated.

LeasePak's standard Depreciation Codes start with the following two characters:

A2	SD	L1	N1	T1
A5	SH	L2	N2	T2
AD	Sl	L3	N3	T3
AS	SM	L4	N4	T4
BY	ST	LH	NH	TH
D1	B1	M1	CR
D2	B2	M2	SF
D3	B3	M3	S1
D4	B4	M4	S2
	BH	MH	S3
			S4

 

Formula Driven Methods

Additional depreciation lives may be entered for existing formula driven methods, such as SL08 or D130. Existing criteria for similar methods are applied. Users are not required to provide depreciation values, since they are formula driven.

ADR

ADR 200% (Double) Declining Balance	A203 to A212
ADR 150% Declining Balance	A503, A505, A507 and A510
ADR Sum of the Years' Digits (SOYD)	AD03, AD05, AD07 and AD10
ADR Straight Line	AS03, AS05, AS07 and AS10

Bypass

BYPASS

BY03, BY05, BY07, BY10, BY15 and BY20

Declining Balance

Declining Balance 125%	D103, D105, D107, and D110
Declining Balance 150%	D203, D205, D207, and D210
Declining Balance 175%	D303, D305, D307 and D310
(Double) Declining Balance 200%	D403 to D420, D445 and D450

Sum of Years

Sum of the Years' Digits (SOYD)

SD03, SD05, SD07 and SD10

Straight Line

Straight Line Half Year Convention

SH03 to SH20

Straight Line

SL01 to SL40

Note: 'SM' and 'ST' codes are restricted, users are not allowed to add additional entries for the following formula driven depreciation methods:

Straight Line Mid-month Convention	SM39 and SM40
Straight Line 100% and 125% Term	ST10 and ST12

 

Table Driven Methods

Additional depreciation lives along with corresponding values for existing LeasePak defined table driven methods may be entered, such as M306 or SF10. Existing business criteria for similar methods are applied.

AMT

Alternative Minimum Tax (AMT)	L1, L2, L3, L4 and LH for life from 03 to 20
Alternative Minimum Tax (AMT)	LH45 and LH50

MACRS

Modified Accelerated Cost Recovery System (MACRS), Mid-Quarter Convention (in service First Quarter)	M103, M105, M107, M110, M115, M120
MACRS Second Quarter	M203, M205, M207, M210, M215, M220
MACRS Third Quarter	M303, M305, M307, M310, M315, M320
MACRS Fourth Quarter	M403, M405, M407, M410, M415, M420
Modified Accelerated Cost Recovery System (MACRS), Half-Year Convention	MH03, MH05, MH07, MH10, MH15,MH20

ACRS

Accelerated Cost Recovery System (ACRS)	CR03, CR05, CR10, and CR15
Accelerated Cost Recovery System (ACRS), Safe Harbor	SF03, SF08, and SF15

Bonus MACRS

Users are allowed to add additional bonus depreciation life for the following table driven depreciation methods: e.g. NH04

Bonus Alternative Minimum Tax (AMT)	B1, B2, B3, B4 and BH for life from 03 to 20
Bonus MACRS First Quarter	N103, N105, N107, N110, N115, N120
Bonus MACRS Second Quarter	N203, N205, N207, N210, N215, N220
Bonus MACRS Third Quarter	N303, N305, N307, N310, N315, N320
Bonus MACRS Fourth Quarter	N403, N405, N407, N410, N415, N420
Bonus MACRS Half Year	NH03, NH05, NH07, NH10, NH15, NH20
MACRS Straight Line Mid-Quarter	S112, S212, S312, S412

 

Note: Users are not allowed to add additional depreciation life for the following table driven depreciation methods:

MACRS Straight Line Mid-Quarter	S112, S212, S312, and S412
Bonus MACRS Straight Line Mid-Quarter	T112, T212, T312, and T412

 

Other Methods

For other user defined methods, LeasePak will apply the percentage directly without any edit checks or adjustments.

Example:

• XX04, Depreciation values could be 40% for first year , 30% for second year, 20% for third year and 10% for fourth year, or
• KK99, Depreciation values of 1.009% for first 98 years, and 1.118% for the last year.

 

Add/Change Depreciation

Select Add to enter a new depreciation code. To change a code description and/or percentage value, select the depreciation code that is to be changed and click Change.

 

This screen is used to enter the Depreciation Code and/or the Default Code that is being added.

• DEPRECIATION CODE
  Enter the new user-defined four character Deprecation Method. LeasePak will display a warning message notifying the user that the code being added is either restricted, previously existing or non-existing.
  
  
• DEFAULT DEPRECIATION CODE
  Select the Default Depreciation Code from the Help menu. Click OK.

This screen allows the user to enter the new code description and/or percentages associated with the new code being entered or changed. The percentage grid will not display for formula driven depreciation methods. When changing a depreciation code, this screen will display first in order to allow the changes in the description and/or percentages to be made.

• DESCRIPTION
  Enter or change the twenty character description for the code.
  
  
• PERCENTAGE
  Enter or change the annual depreciation percentage value for the code.
  
  
• TOTAL PERCENTAGE
  This field displays the total of the depreciation percentage value for the code. If the total percentage does not equal 100%, LeasePak will display a warning message notifying the user that the total percentage exceeds 100%. The user may choose to continue or may revise the percentage entry LeasePak will update the RDT table once Save and/or OK is selected.

Delete Depreciation

 

Select the Depreciation Code to be deleted and click the Delete button.The following message is displayed, notifying the user that the depreciation code may be tied to an asset and may cause EOP processes to fail if the code is deleted. Select Yes to confirm deletion or select cancel. Exercise caution when deleting a depreciation code.

 

LeasePak  Reference Guide

© 2002 by McCue Systems Incorporated.
All rights reserved.

The information contained in this document is the property of McCue Systems, Inc. Use of the information contained herein is restricted. Conditions of use are subject to change without notice. McCue Systems, Inc. assumes no liability for any inaccuracy that may appear in this document; the contents of this document do not constitute a promise or warranty. The software described in this document is furnished under license and may be used or copied only in accordance with the terms of said license. Unauthorized use, alteration, or reproduction of this document without the written consent of McCue Systems, Inc. is prohibited.