Suspend Depreciation So Selected Periods Do Not Calculate

Is it possible to have some assets not calculate depreciation for several months?

Yes, this can be accomplished with a type of disposal called suspend. A suspend allows depreciation to be halted for a period of time and then restarted later. The suspend will effectively pause the depreciation calculation and then extend the asset life for the same number of periods to ensure full depreciation.

Let’s say that a piece of machinery was being moved to a new location, but the new location is not completed yet. That piece of machinery might sit idle for several months and not be eligible for depreciation during that time. Once the new location is open and the machinery is placed back in service, then depreciation could restart.

Let’s look at an example:

Here you have a $1,000 asset being depreciated over 5 years with a suspend for the first 6 months of 2013. As you can see, the normal annual depreciation is $200, but 2013 is only taking $100. A normal 5 year life would have finished at the end of 2016, but you can see here that the recovery periods were extended from 60 periods (5 years times 12 months) to 66 periods. The suspended 6 months are tacked on at the end so the asset now finishes in 2017.

As you can see, suspend is a handy utility to deal with this specialized request. By pausing depreciation for a period of time, Bassets eDepreciation allows the net book value to be properly spread over the remaining periods in the asset’s life. This ensures a consistent calculation based on the original asset properties.

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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.