Tag Archives: 445 Calendar

4-4-5 Calendar to Calculate Period Depreciation

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A 4-4-5 calendar is used by some industries like retail and manufacturing to manage their accounting periods. This presents some advantages over a standard calendar since each period will always end on the same day of the week. So this allows for easier comparison of current year sales to prior years in retail and scheduling in manufacturing.

A 4-4-5 calendar only has 364 days (7 days * 52 weeks), so most companies will make an adjustment every 5 years or so with a 53 week year to account for the missing day. Here is a sample calendar for 2013:4-4-5 Calendar

The heart of a 4-4-5 module is a calendar that allows you to enter the first and last day of each accounting period. For example, if the first day of the year was December 30, 2012 and the last day of the first accounting period was January 26, 2013 then we would have a 4 week period of 28 days. The second period would follow the same pattern and then the third period would be five weeks. Each quarter would have 13 weeks or 91 days and every month would end on Saturday.

To calculate monthly depreciation with a 4-4-5 calendar, it is critical to calculate based on the number of days in the current period. The formula to calculate depreciation for the first period would be:

28 days

—————- X Annual Depreciation = Period Depreciation

365 days

This way the annual depreciation is properly spread based on the actual number of days in each period. Many fixed asset software packages do not offer this type of alternate calculation and will just divide the annual depreciation by 12 periods. If your business follows a 4-4-5 calendar then make sure that your depreciation software correctly matches your period accounting.

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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.

Case Study – Micro Electronics

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Micro Electronics is the parent of several technologically gifted children: its divisions. The company’s nearly 20 Micro Center computer retail stores, which average 45,000 sq. ft., feature about 36,000 products organized in more than a dozen specialized departments. Micro Center is the largest of Micro Electronics’ divisions and operates in 13 states. Micro Electronics sells its own brands of notebook and desktop computers under the WinBook and PowerSpec names. Micro Center Online is the company’s online and phone order operation.

When Micro Electronics decided to switch to the Bassets Fixed Asset System from a competitive product, they got more than they bargained for. They selected Bassets based on the accuracy of their depreciation calculations with a 445 calendar. In addition, they wanted a CIP (Construction in Progress) module to track their invoice activity. Surprisingly, the biggest benefit may have come from what proved to be a difficult data conversion. Mismatching of property type and depreciation method/first year convention/recovery periods in the old system tested the Bassets technical staff, but now Micro Electronics is getting the correct monthly depreciation calculations.

To read more about how Bassets helped other companies with their depreciation needs, go to the Bassets Fixed Assets case studies page.

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.