Custom declining balance without true-up depreciation method—Fixed Assets Management

Fixed Assets Management supports the custom declining balance without true-up method (CDB) for depreciating assets.

The custom declining balance without true-up method depreciates assets at a user-defined rate. You can choose a depreciation rate from 1.00% to 100.00%. This method results in higher depreciation amounts in the early years of an asset's useful life and decreases over time as the asset's book value decreases. Since this method does not include a true-up, any remaining depreciation at the end of the asset's life is treated as a loss upon disposal.

This method is useful for companies that require flexibility in defining depreciation rate without needing to account for the asset's total depreciable cost in the depreciation schedule.

Conventions

This method supports the following conventions:

  • Full month

  • Half year

  • Full year

Impact of book type on posting periods

For Tax books, if the convention is Half year or Full year, Sage Intacct uses the entity’s tax year-end for depreciation posting period dates. If the entity's tax year is not defined, it uses the company’s instead. For example, if the First tax month is July, then the posting periods each year will be on June 30th.

For non-tax books, if the convention is Full month, Sage Intacct uses the First fiscal month defined in Company settings to determine how many periods are in each year. For example, if the first fiscal month is February and the asset is placed in service in November, there are 3 periods in the first year of service (November, December, and January).

Formulas

  • Depreciation for each month of the first year:

    (C−S)×(12−M+1)÷12×DR÷N

  • Depreciation for each month of subsequent years:

    (C−S−AD)×DR÷12

Variables

  • C = Asset cost
  • S = Salvage value
  • AD = Sum of accumulated depreciation for the previous years
  • M = Month placed in service (1 = first month of the fiscal year, 2 = second month of the fiscal year, and so on)
  • DR = Depreciation rate
  • N = Number of months in the fiscal year

  • Depreciation for the first year:

    (C−S−AD)×DR÷2

  • Depreciation for each subsequent year:

    (C−S−AD)×DR

Variables

  • C = Asset cost
  • S = Salvage value
  • AD = Total accumulated depreciation
  • DR = Depreciation rate

Depreciation for each year:

(C−S−AD)×DR

Variables

  • C = Asset cost
  • S = Salvage value
  • AD = Total accumulated depreciation
  • DR = Depreciation rate

Examples

Scenario:

  • Depreciation rate: 30.00%

  • Useful life: 60 months

  • Convention: Full month

  • Asset cost: $210,000.00

  • Salvage value: $10,000.00

  • Depreciable cost: $200,000.00

  • In-service date: January 1st, 2024

  • First fiscal month: January

  • Use salvage value: True

The following schedules uses the round-half-up method to calculate amounts. The depreciation entry amounts you see in Intacct may differ by $0.01. Fixed Assets Management automatically adjusts for differences in total accumulated depreciation caused by rounding and distributes those differences across the final months of each fiscal year to ensure the total accumulated depreciation is correct.

Schedule:

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) Calculation
1 January 31st, 2024 5,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
2 February 29th, 2024 5,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
3 March 31st, 2024 5,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
12 December 31st, 2024 5,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
13 January 31st, 2025 3,500.00 (200,000.00 depreciable cost − 60,000.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
24 December 31st, 2025 3,500.00 (200,000.00 depreciable cost − 60,000.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
25 January 31st, 2026 2,450.00 (200,000.00 depreciable cost − 102,000.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
36 December 31st, 2026 2,450.00 (200,000.00 depreciable cost − 102,000.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
37 January 31st, 2027 1,715.00 (200,000.00 depreciable cost − 131,400.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
48 December 31st, 2027 1,715.00 (200,000.00 depreciable cost − 131,400.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
49 January 31st, 2028 1,200.50 (200,000.00 depreciable cost − 151,980.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
60 December 31st, 2028 1,200.50 (200,000.00 depreciable cost − 151,980.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months

At the end of the schedule, $33,614.00 of depreciation remains, which will be recorded as a loss upon disposal.

Scenario:

  • Depreciation rate: 30.00%

  • Useful life: 60 months

  • Convention: Full month

  • Asset cost: $210,000.00

  • Salvage value: $10,000.00

  • Depreciable cost: $200,000.00

  • In-service date: March 31st, 2024

  • First fiscal month: January

  • Use salvage value: True

The following schedules uses the round-half-up method to calculate amounts. The depreciation entry amounts you see in Intacct may differ by $0.01. Fixed Assets Management automatically adjusts for differences in total accumulated depreciation caused by rounding and distributes those differences across the final months of each fiscal year to ensure the total accumulated depreciation is correct.

Schedule:

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) Calculation
1 March 31st, 2024 5,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × (12 − 3 + 1) ÷ 12 × .3000 depreciation rate ÷ 10 months
2 April 30th, 2024 5,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × (12 − 3 + 1) ÷ 12 × .3000 depreciation rate ÷ 10 months
3 May 31st, 2024 5,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × (12 − 3 + 1) ÷ 12 × .3000 depreciation rate ÷ 10 months
... ... ... ...
10 December 31st, 2024 5,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × (12 − 3 + 1) ÷ 12 × .3000 depreciation rate ÷ 10 months
11 January 31st, 2025 3,750.00 (200,000.00 depreciable cost − 50,000.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
22 December 31st, 2025 3,750.00 (200,000.00 depreciable cost − 50,000.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
23 January 31st, 2026 2,625.00 (200,000.00 depreciable cost − 95,000.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
34 December 31st, 2026 2,625.00 (200,000.00 depreciable cost − 95,000.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
35 January 31st, 2027 1,837.50 (200,000.00 depreciable cost − 126,500.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
46 December 31st, 2027 1,837.50 (200,000.00 depreciable cost − 126,500.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
47 January 31st, 2028 1,286.25 (200,000.00 depreciable cost − 148,550.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
... ... ... ...
58 December 31st, 2028 1,286.25 (200,000.00 depreciable cost − 148,550.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
59 January 31st, 2029 900.38 (200,000.00 depreciable cost − 163,985.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months
60 February 28th, 2029 900.38 (200,000.00 depreciable cost − 163,985.00 accumulated depreciation) × .3000 depreciation rate ÷ 12 months

At the end of the schedule, $34,214.25 of depreciation remains, which will be recorded as a loss upon disposal.

Scenario:

  • Depreciation rate: 30.00%

  • Useful life: 5 years

  • Convention: Half year

  • Asset cost: $210,000.00

  • Salvage value: $10,000.00

  • Depreciable cost: $200,000.00

  • In-service date: January 1st, 2024

  • First tax month: January

  • Use salvage value: True

Schedule:

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) Calculation
1 December 31st, 2024 30,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × .3000 depreciation rate ÷ 2
2 December 31st, 2025 51,000.00 (200,000.00 depreciable cost − 30,000.00 accumulated depreciation) × .3000 depreciation rate
3 December 31st, 2026 35,700.00 (200,000.00 depreciable cost − 81,000.00 accumulated depreciation) × .3000 depreciation rate
4 December 31st, 2027 24,990.00 (200,000.00 depreciable cost − 116,700.00 accumulated depreciation) × .3000 depreciation rate
5 December 31st, 2028 17,493.00 (200,000.00 depreciable cost − 141,690.00 accumulated depreciation) × .3000 depreciation rate

At the end of the schedule, $40,817.00 of depreciation remains, which will be recorded as a loss upon disposal.

Scenario:

  • Depreciation rate: 30.00%

  • Useful life: 5 years

  • Convention: Full year

  • Asset cost: $210,000.00

  • Depreciable cost: $200,000.00

  • Salvage value: $10,000.00

  • In-service date: January 1st, 2024

  • First tax month: February

  • Use salvage value: True

Schedule:

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) Calculation
1 January 31st, 2024 60,000.00 (200,000.00 depreciable cost − 0.00 accumulated depreciation) × .3000 depreciation rate
2 January 31st, 2025 42,000.00 (200,000.00 depreciable cost − 60,000.00 accumulated depreciation) × .3000 depreciation rate
3 January 31st, 2026 29,400.00 (200,000.00 depreciable cost − 102,000.00 accumulated depreciation) × .3000 depreciation rate
4 January 31st, 2027 20,580.00 (200,000.00 depreciable cost − 131,400.00 accumulated depreciation) × .3000 depreciation rate
5 January 31st, 2028 14,406.00 (200,000.00 depreciable cost − 151,980.00 accumulated depreciation) × .3000 depreciation rate
6 January 31st, 2029 10,084.20 (200,000.00 depreciable cost − 166,386.00 accumulated depreciation) × .3000 depreciation rate

At the end of the schedule, $23,529.80 of depreciation remains, which will be recorded as a loss upon disposal.