| To calculate Declining Balance depreciation |  |
- | In the Declining Balance method, ERP LN calculates each year's total depreciation by applying a constant percentage to the asset's net book value. The declining balance methods allocate the largest portion of an asset's cost to the early years of its useful life. It does not depreciate the asset to its salvage value. Note If the asset for which you are calculating depreciation contains an averaging convention, ERP LN adjusts the depreciation expense for the first halfyear, quarter, or month calculation. The Declining Balance (DB) method has two variations based on the calculation mode in use for the asset in its related books: DB daily DB periodic DB daily The Declining Balance Daily formula is used when the calculation mode for the selected book is daily. ERP LN calculates the depreciation amount for each period based on the exact number of days the period contains. The following formulas are used: U.S. tax books:
      NBV = (Cost - Salvage - Sec 179) * (Business Percentage / 100) - AD
- Other books:
      Monthly Depreciation amount = NBV * Declined Balance Percentage * Days of Period / Life in Days
      NBV = Cost - Salvage - AD
where: NBV = Net Book Value AD = Accumulated Depreciation Example
Asset | Komatsu
Service Date | 01/01/2002
Transaction Cost | 10.000
Decl.Balance perc. | 10%
Life in Days | 365
    NBV 10000 * Declined Balance Percentage 10% * Days of Period 31 / Life in Days 365 = 84.93
- For MACRS and ACRS the salvage value is not applied to depreciation of U.S. tax and commercial books. DB periodic The Declining Balance Periodic formula is used when the calculation mode for the selected book is periodic. ERP LN divides the year evenly into the number of periods your calendar specifies, then calculates depreciation for each resulting period. The following formulas are used: U.S. tax books:
      NBV = (Cost - Salvage - Sec 179) * (Business Percentage/100) - AD
- Other books:
      NBV = Cost - Salvage - AD
    Monthly Depreciation amount = NBV * Declined Balance Percentage / 12
where: NBV = Net Book Value AD = Accumulated Depreciation Example
Asset | Komatsu
Service Date | 01/01/2002
Transaction Cost | 10.000
Decl.Balance perc. | 10%
Life in Months | 12
    NBV 10000 * Declined Balance Percentage 10%/Life in Months 12 = 83,33
- In MACRS and ACRS the salvage value is not applied to depreciation of U.S. tax and commercial books. Financial books:
      (Cost - Salvage Value - A/D) * 1/Life in months
- Tax books:
      (Cost - Salvage Value - Sec 179 - A/D) * Business Percent * 1/Life in months