Depreciation - sum of years digits |
The system computes sum of years digits depreciation as follows:
Step 1. Calculates the depreciation base (original cost + capitalized value)
Step 2. Calculates the depreciation remaining (depreciation base - depreciation previously taken)
Step 3. Performs the following tasks, dependent on the depreciation remaining
Less than or equal to zero (0): Sets the depreciation months remaining to 0
More than 0: Calculates the year of the unit's life (depreciation life months/12). If there is a fractional remainder, FASuite adds 1 to the quotient.
Step 4. Calculates the sum of the year's digits, starting with zero and ending with the year of the unit's life. (For example, for year 4, the sum of the year's digits = 0 + 1 + 2 + 3 + 4 = 10.)
Step 5. Calculates the years remaining in the unit's life (depreciation months remaining/12). If there is a fractional remainder and the months remaining is less than the life months, FASuite adds 1 to the quotient.
Step 6. Performs the following tasks, dependent on the number of years remaining:
Less than or equal to 0: Sets the depreciation for the current month and the depreciation months remaining to 0.
More than 0: Calculates the depreciation for the current month (depreciation base/[sum of the years digits x 12]).
Step 7. Subtracts 1 from the depreciation months remaining.
Step 8. If the depreciation for the current month is more than the depreciation remaining, FASuite sets the following:
Depreciation for the current month to depreciation remaining.
Depreciation months remaining to 0.