4–4–5 Calendar Depreciation Method

The 4-4-5 Calendar Depreciation method computes depreciation daily. When you enable the Use Accounting Period Dates for Depreciation preference in the Fixed Assets Setup page, the generated depreciation history record and journal entry will use the base period's end date.

Formula: 12*((CC-RV)/AL)*(DP/FY)

DP/FY is a pro-rated calculation based on the number of days in a period. In a 4–4–5 calendar, this equals to 28 days for 4 weeks, 35 days for 5 weeks, and 36 days for the last period of the year.

Note:

When using the 4–4–5 calendar depreciation method, make sure the asset’s depreciation rule isn't set to pro-rata. The pro-rata rule computes depreciation based on a 30–day month. In a 4–4–5 calendar, the difference between the estimated days and the real period length changes the depreciation amount.

Period	Start Date	End Date	DP	YTD No. of Days
1	1/1/2015	1/28/2015	28	28
2	1/29/2015	2/25/2015	28	56
3	2/26/2015	4/1/2015	35	91
4	4/2/2015	4/29/2015	28	119
5	4/30/2015	5/27/2015	28	147
6	5/28/2015	7/1/2015	35	182
7	7/2/2015	7/29/2015	28	210
8	7/30/2015	8/26/2015	28	238
9	8/27/2015	9/30/2015	35	273
10	10/1/2015	10/28/2015	28	301
11	10/29/2015	11/25/2015	28	329
12	11/26/2015	12/31/2015	36	365

If you have an asset with a cost of 60,000, to be depreciated in 24 months, the following table shows the depreciation using the formula 12*((CC-RV)/AL)*(DP/FY). Note that FY is equivalent to 365.

Transaction Type	Date	Transaction Amount	Computation	Net Book Value
Depreciation	12/31/2018	2,958.90	12((60000–0)/24)*(36/365)	30,000.01
Depreciation	11/25/2018	2,301.37	12((60000–0)/24)*(28/365)	32,958.91
Depreciation	10/28/2018	2,301.37	12((60000–0)/24)*(28/365)	35,260.28
Depreciation	9/30/2018	2,876.71	12((60000–0)/24)*(35/365)	37,561.65
Depreciation	8/26/2018	2,301.37	12((60000–0)/24)*(28/365)	40,438.36
Depreciation	7/29/2018	2,301.37	12((60000–0)/24)*(28/365)	42,739.73
Depreciation	7/1/2018	2,876.71	12((60000–0)/24)*(35/365)	45,041.10
Depreciation	5/27/2018	2,301.37	12((60000–0)/24)*(28/365)	47,917.81
Depreciation	4/29/2018	2,301.37	12((60000–0)/24)*(28/365)	50,219.18
Depreciation	4/1/2018	2,876.71	12((60000–0)/24)*(35/365)	52,520.55
Depreciation	2/25/2018	2,301.37	12((60000–0)/24)*(28/365)	55,397.26
Depreciation	1/28/2018	2,301.37	12((60000–0)/24)*(28/365)	57,698.63
Acquisition	1/1/2018	60,000.00	12((60000–0)/24)*(28/365)	60,000.00

If your accounting period is set to Calendar Months, using the 4-4-5 Calendar Depreciation method will compute the monthly depreciation based on the number of days for a specific month.

Note:

The 4–4–5 calendar depreciation doesn't support irregular accounting periods. If you want to create monthly depreciation history records and journal entries for an irregular accounting period, you must disable the Use Accounting Period Date for Depreciation preference in the FAM System Setup page. Also, when you turn off this preference, the depreciation uses calendar months. In the 4–4–5 depreciation formula, your DP should match the number of days in a specific month.

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