Add a Depreciation Method

You can define the types of depreciation methods that are required for managing your enterprise's assets.

To add a depreciation method:

1. From the Navigation menu, click Settings > Accounting > Asset Management.
2. Click the Methods tab of the Asset Management Settings form.
3. On the toolbar of the Depreciation Methods grid, click Insert to insert a blank row in the grid.
4. In the Code field, enter a code for the depreciation method. For example, enter SY for Sum of Years or NC for No Calculation. The code displays in the Methods drop-down list on the Asset Type tab.
5. In the Description field, enter a description for the depreciation method. This description displays in the Method drop-down list on the GL Book tab in the Equipment hub.
6. In the Useful Life in Years field, enter a number of years. The useful life number determines how many periods, in total, should be applied to the depreciation method. This number, along with the Recovery Years, determines how many grid rows display in the Secondary grid on this form. For the straight-line method, you can modify this number on the Asset Type tab. For all other types of depreciation methods, you can only modify the useful life in years here, on the Methods tab. Use this information to specify the periods and percentage for the depreciation method. DPS applies this to the GL Book tab in the Equipment hub.
7. In the Recovery Years field, enter a number of years. The recovery years number determines how many periods, in total, should be applied to the depreciation method. This field defaults to the number that is entered in the Useful Life in Years column. You can edit this number as follows:
   • Useful life plus 1
   • Useful life plus 2

   The number of recovery years that you specify also determines the number of grid rows in the Secondary grid on this tab.

8. Select the In Use option for each method that you want to make available in the Depreciation Method drop-down list on the Asset Type tab of this form. If this option is cleared, the depreciation method is not available for selection. You cannot disable the straight-line method because it is system-defined. You can only delete a depreciation method that is not already assigned to an asset on the Asset Type tab. If the depreciation method is assigned to an asset, you must first clear the In Use option on the depreciation method's row.
9. In the Secondary grid, view the depreciation method's years and periods, as defined by the Recovery Years and Asset Periods per Year fields. You can then enter a Percentage to apply for the depreciation. This grid's heading is dynamic, based on the type of depreciation method that you select in the Depreciation Methods grid.
10. The Year column displays the sequential number years: 1, 2, 3, 4, and so on. The grid displays one year per row. The number of rows is based on the number of Recovery Years that you enter in the Depreciation Methods grid.
11. The Periods column displays the value entered in the Asset Periods per Year field on the General tab of this form. DPS calculates the total value for the associated year and spreads the amount over the number of defined periods. You can modify this value. For example, if you need to use a half year convention for an asset with a useful life of three years, you can define the first year to be 6 months, the second year to be 12 months, the third year to be 12 months, and the fourth year to be 6 months.

    The sum of the number of periods entered displays in the Totals row at the bottom of the grid. If the number of periods on the General tab does not match the sum entered on this grid, DPS displays the following warning: The total number of periods does not match the useful life time X asset periods per year.

12. In the Percentage column, enter a percentage for each depreciation amount that is listed in the grid. The sum of the percentages entered in all grid rows displays in the Totals row at the bottom of the grid. This sum of all rows should total 100.
13. Click Save.