How can you change the useful life of an asset without altering prior accumulated depreciation and only impact the calculations going forward?
The Remainder Life method provides the user with the ability to shorten or lengthen the useful life of an asset at any time during the original recovery period. When the Remainder Life method is selected, Bassets eDepreciation will amortize the net book value as of the effective date of the change to Remainder Life in equal amounts over the new remaining life. There are four key pieces of information shown below:
The start date is the effective date to begin the remainder life calculation and the new useful life can be entered in both years and months. The original method is stored to ensure the accuracy of the prior calculation.
Changing the useful life of an asset will not alter the total amount of depreciation of that asset. However, it will impact the amount that is depreciated by year. For instance if a $6,000 asset was using straight line depreciation over 5 years, then the annual depreciation amount would be $1200 or $100 per period. If the useful life was then changed to 1 year after 2 years have already been depreciated, the remaining $3,600 would be spread over 12 months or $300 per period.
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More information about Bassets eDepreciation software can be found at Bassets.net. While there you can set up a demonstration, download a free evaluation copy and get a personalized pricing estimate.