Daily depreciation method—Fixed Assets Management

Fixed Assets Management supports the Daily method (DR) for depreciating assets.

The Daily method is a variant of the traditional straight-line depreciation method. Under this method, depreciation is calculated annually and then distributed across months based on the number of days in each month. Partial years are prorated.

When using the Daily method, you provide the useful life in months. Fixed Assets Management automatically calculates the number of years and days that the asset is in service accordingly.

This method is especially useful for assets acquired or disposed of mid-month or mid-year, because it enables more precise depreciation for partial periods.

Conventions

The Daily method only supports the Full month convention. However, unlike other methods that follow this convention, assets using the Daily method begin depreciating on their actual in-service date, not the first day of the month.

Formulas

  • Depreciation for each month of a year:

    ((C − S) ÷ (UL ÷ 12)) × (Dm ÷ Dy) × (Dy ÷ 365)

  • Depreciation for the last month of each year:

    ((C − S) ÷ (UL ÷ 12)) × (Dy ÷ 365) − ADC

  • Depreciation for each month of the last year:

    (C − S − ADP) × (Dm ÷ Dy)

  • Depreciation for the last month of the last year:

    (C − S − ADP) − ADC

Variables

  • C = Asset cost
  • S = Salvage value
  • UL = Useful life in months
  • Dm = Number of days the asset was in service during the month
  • Dy = Number of days the asset was in service during the year
  • ADC = Accumulated depreciation for the current year (excluding the last month)
  • ADP = Accumulated depreciation for the previous years

Calculation notes

  • Partial years are prorated. In full years, the expression Dy ÷ 365 simplifies to 1.

  • For leap years, 365 changes to 366.

  • A true-up is applied in the last month of each year and again in the final year to ensure that the asset fully depreciates.

  • If the in-service date is on the 1st of the month, then the number of periods in the schedule is equal to the useful life in months. If it's not on the 1st, an additional period is added to the schedule.

  • Calculations use the round-half-up method.

Example

Scenario:

  • Useful life: 70 months (5.83 years)

  • Convention: Full month

  • Asset cost: $3,000.00

  • Salvage value: $500.00

  • Depreciable cost: $2,500.00

  • In-service date: May 10th, 2025

  • First fiscal month: January

  • Use salvage value: True

The following schedule calculates depreciation amounts in a single step. The amounts you see in Fixed Assets Management may differ by $0.01 due to rounding first for the yearly depreciation amount and then again for the individual depreciation period.

Schedule:

Depreciation schedule
Period Scheduled posting date Depreciation amount ($) Calculation
1 May 31st, 2025 25.83 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (22 days in service during the month ÷ 236 days in service during the year) × (236 days in service during the year ÷ 365)
2 June 30th, 2025 35.22 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 236 days in service during the year) × (236 days in service during the year ÷ 365)
3 July 31st, 2025 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 236 days in service during the year) × (236 days in service during the year ÷ 365)
4 August 31st, 2025 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 236 days in service during the year) × (236 days in service during the year ÷ 365)
5 September 30th, 2025 35.22 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 236 days in service during the year) × (236 days in service during the year ÷ 365)
6 October 31st, 2025 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 236 days in service during the year) × (236 days in service during the year ÷ 365)
7 November 30th, 2025 35.22 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 236 days in service during the year) × (236 days in service during the year ÷ 365)
8 December 31st, 2025 36.41 ((2,500 depreciable cost ÷ (70 months of useful life ÷ 12)) × (236 days in service during the year ÷ 365) − 240.69 accumulated depreciation during the year
9 January 31st, 2026 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
10 February 28th, 2026 32.88 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (28 days in service during the month ÷ 365 days in service during the year)
11 March 31st, 2026 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
12 April 30th, 2026 35.23 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 365 days in service during the year)
13 May 31st, 2026 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
14 June 30th, 2026 35.23 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 365 days in service during the year)
15 July 31st, 2026 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
16 August 31st, 2026 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
17 September 30th, 2026 35.23 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 365 days in service during the year)
18 October 31st, 2026 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
19 November 30th, 2026 35.23 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 365 days in service during the year)
20 December 31st, 2026 36.37 ((2,500 depreciable cost ÷ (70 months of useful life ÷ 12)) − 392.20 accumulated depreciation during the year
... ... ... ...
57 January 31st, 2030 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
58 February 28th, 2030 32.88 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (28 days in service during the month ÷ 365 days in service during the year)
59 March 31st, 2030 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
60 April 30th, 2030 35.23 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 365 days in service during the year)
61 May 31st, 2030 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
62 June 30th, 2030 35.23 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 365 days in service during the year)
63 July 31st, 2030 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
64 August 31st, 2030 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
65 September 30th, 2030 35.23 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 365 days in service during the year)
66 October 31st, 2030 36.40 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (31 days in service during the month ÷ 365 days in service during the year)
67 November 30th, 2030 35.23 2,500 depreciable cost ÷ (70 months of useful life ÷ 12) × (30 days in service during the month ÷ 365 days in service during the year)
68 December 31st, 2030 36.37 ((2,500 depreciable cost ÷ (70 months of useful life ÷ 12)) − 392.20 accumulated depreciation during the year
69 January 31st, 2031 36.49 (2,500 depreciable cost − 2419.96 total accumulated depreciation) × (31 days in service during the month ÷ 68 days in service during the year)
70 February 28th, 2031 32.96 (2,500 depreciable cost − 2419.96 total accumulated depreciation) × (28 days in service during the month ÷ 68 days in service during the year)
71 March 31st, 2031 10.59

(2,500 depreciable cost − 2419.96 total accumulated depreciation) − 69.45 accumulated depreciation during the year

The asset was placed in service on May 10th, so an extra period is added to depreciate a full 70 months of useful life. The asset is depreciated through March 9th.