Example: Depreciation in Final Year of Useful Life 

 

Starting Data:

Acquisition value of asset:    10000

Useful life:               5 years

Annual depreciation:       2000 (20%)

Remaining useful life:           1 year

Net book value:        1000 (unplanned depreciation 1000)

Scrap value:                  None

Acquisition last year:            5000 on April 1

 

 

Depreciation Calculation

Year	Transaction Type	Amount	Ordinary Depreciation	Unplanned Depreciation	Net Book Value
01	Acquisition	10000	2000		8000
02			2000	1000	5000
03			2000		3000
04			2000		1000
April 05	Acquisition	5000	?

 

 

The values for the individual periods and period intervals of last year are:

Period Interval	Number of Periods	Base Value for Dep. Calculation	Depreciation Calculation	Depreciation per Period Interval
1 (Periods 1 - 3)	3	10000	10000 x 20% x (3/12)	500
2 (Periods 4 - 12)	9	15000	15000 x 20% x (9/12)	2250

 

The totals from period intervals 1 and 2 result in an annual depreciation amount of 2750.