| # Net Book Value (NBV)-oriented depreciation The Net book-value (NBV) oriented depreciation method is a variant of the declining balance depreciation method. In this method, the declining balance percentage is set for a period of a year. The computation is as follows: depreciation amount = net book value * declining percentage / 100 U.S. tax books: NBV = (Cost - Salvage - Sec179) * (Business Percentage/100) - AD Other books NBV = Cost - Salvage - AD Periodic Depreciation = NBV * (Declined Balance Percentage/ 100) * Periods Depreciated/ Periods in Fiscal Year Daily Depreciation = NBV * (Declined Balance Percentage/100) * Days Depreciated/Days in Fiscal Year) For MACRS and ACRS, the salvage value is not applied to the depreciation of U.S. tax and commercial books. Straight-Line calculation If you use a depreciation method and the Switch To SL check box is selected in the Depreciation Method (tffam7110s000) details session, LN either applies: The normal Straight-Line calculation. The Straight-Line calculation with Remaining Life / Remaining Value. LN applies this calculation according to the Straight Line (SL) Switch Criteria defined in the FAM Parameters (tffam0500m000) session. The switch occurs in the first period in which the straight-line calculation results in a larger depreciation amount than the NBV-oriented depreciation. Normal Straight Line: Daily Depreciation = NBV * Days Depreciated/ Days in Fiscal Year Periodic Depreciation = NBV * Periods Depreciated/Periods in Fiscal Year Straight Line with Remaining Life / Remaining Value: Daily Depreciation = NBV * Days Depreciated/Remaining Life Days Periodic Depreciation = NBV * Periods Depreciated/Remaining Life Periods If an asset book in the last period of the asset life has a net book value greater than zero (0), this value is depreciated fully in the last period. |