Depreciation - Straight Line

Straight-line depreciation depreciates the value of an equipment unit by the same percentage each month. Straight-line depreciation is computed as follows:

Step 1.  Calculate the depreciation base (original cost + capitalized value - salvage value). The unit’s original cost and capitalized value are specified on the Acquisition tab on the Data -> Equipment Units -> Fleet Equipment screen.

Step 2.  Calculate the depreciation remaining (depreciation base - depreciation previously taken). The end-of-period month is included when calculating total depreciation.

Step 3.  Set the following, dependent on the depreciation remaining:

• Less than or equal to 0: Set the depreciation for the current month and the depreciation months remaining to zero (0)

• More than 0: Calculate the depreciation for the current month (depreciation base / depreciation life months)

Step 4.  Subtract 1 from the number of depreciation months remaining.

If depreciation for the current month is more than the depreciation remaining, the following are set:

• Depreciation for the current month to the depreciation remaining

• Depreciation months remaining to 0