Factors are the percentages that are used to depreciate assets. When you set up a fixed asset depreciation profile and select the value in the field in the form, you can set up progressive, digressive, or straight line depreciation:

  • If you select progressive depreciation, the amount of depreciation increases with each depreciation period.

  • If you select digressive depreciation, the amount of depreciation per period decreases over time.

  • If you select straight line depreciation, the depreciation is the same in each period.

The rules and examples below indicate how you can set up factors for each type of depreciation.

Note Note

When you select in the field, the field and the field are displayed.

Progressive depreciation

The value in the field is greater than (>) 50.

  • Example

is 100,000, the factor is 70, service life is 10 years, and depreciation starts on 1. The depreciation amounts and net book value amounts are shown only for the first six years of service life.

Year

Period

Depreciation amount

Net book value amount

1

31

307.69

99,692.31

2

31

1,447.21

98,245.04

3

31

3,104.50

95,140.54

4

31

5,150.21

89,990.33

5

31

7,522.95

82,467.38

6

31

10,184.06

72,283.32

Digressive depreciation

The value in the field is less than (<) 50.

Example

is 100,000, the factor is 20, the service life is 10 years, and depreciation starts on 1. The depreciation amounts and net book value amounts are shown only for the first six years of service life.

Year

Period

Depreciation amount

Net book value amount

1

31

56,080.43

42,919.57

2

31

10,665.70

33,253.78

3

31

7,156.22

26,097.56

4

31

5,538.06

20,559.50

5

31

4,579.89

15,979.61

6

31

3,937.36

12,042.25

Straight line depreciation

The value in the field is equal to (=) 50.

In this case, the depreciation is the same in each period, and you should consider the implications of your choices in other fields, as described in Straight line service life depreciation.

See Also