Sample Scenarios for Compound Asset Depreciation
The following describes different scenarios that you may encounter when depreciating a compound asset. A corresponding table shows sample values for the compound asset and the component before and after depreciation. For each scenario described, the straight line accounting method is used to depreciate the assets on a monthly basis.
Scenario 1: Depreciate a new compound asset that contains new components, all of which have the same depreciation start date, for 1 month. Selected depreciation period is 1/31/2015.
|
|
Before Depreciation |
After Depreciation |
||||
|---|---|---|---|---|---|---|
|
|
Compound |
Component 1 |
Component 2 |
Compound |
Component 1 |
Component 2 |
|
Asset Status |
New |
New |
New |
Depreciating |
Depreciating |
Depreciating |
|
Depreciation Start Date |
1/1/2015 |
1/1/2015 |
1/1/2015 |
|
|
|
|
Asset Life |
6 |
3 |
6 |
|
|
|
|
Asset Original Cost |
900 |
300 |
600 |
|
|
|
|
Asset Current Cost |
900 |
300 |
600 |
|
|
|
|
Current Net Book Value |
900 |
300 |
600 |
700 |
200 |
500 |
|
Cumulative Depreciation |
|
|
|
200 |
100 |
100 |
|
Last Depreciation Period |
|
|
|
1 |
1 |
1 |
|
Last Depreciation Amount |
|
|
|
200 |
100 |
100 |
|
Last Depreciation Date |
|
|
|
1/31/2015 |
1/31/2015 |
1/31/2015 |
Scenario 2: Fully depreciate all components of a compound asset. Each component has a different depreciation end date. Selected depreciation period is 9/14/2015.
|
|
Before D |
After Depreciation |
||||
|---|---|---|---|---|---|---|
|
|
Compound |
Component 1 |
Component 2 |
Compound |
Component 1 |
Component 2 |
|
Asset Status |
New |
New |
New |
Fully Depreciated |
Fully Depreciated |
Fully Depreciated |
|
Depreciation Start Date |
1/1/2015 |
6/15/2015 |
1/1/2015 |
|
|
|
|
Depreciation End Date |
9/14/2015 |
9/14/2015 |
8/14/2015 |
|
|
|
|
Asset Life |
9 |
3 |
6 |
|
|
|
|
Asset Original Cost |
900 |
300 |
600 |
|
|
|
|
Asset Current Cost |
900 |
300 |
600 |
|
|
|
|
Current Net Book Value |
900 |
300 |
600 |
0 |
0 |
0 |
|
Cumulative Depreciation |
|
|
|
900 |
300 |
600 |
|
Last Depreciation Period |
|
|
|
9 |
3 |
6 |
|
Last Depreciation Amount |
|
|
|
100 |
100 |
100 |
|
Last Depreciation Date |
|
|
|
9/30/2015 |
9/30/2015 |
8/31/2015 |
Scenario 3: Depreciate a compound asset whose component depreciation history record has no transaction amount. Selected depreciation period is 1/31/2015.
|
|
Before Depreciation |
After Depreciation |
||
|---|---|---|---|---|
|
|
Compound |
Component 1 |
Compound |
Component 1 |
|
Asset Status |
New |
New |
Depreciating |
Depreciating |
|
Depreciation Start Date |
1/1/2015 |
1/1/2015 |
|
|
|
Depreciation End Date |
3/31/2015 |
3/31/2015 |
|
|
|
Asset Life |
3 |
3 |
|
|
|
Asset Original Cost |
0 |
0 |
|
|
|
Asset Current Cost |
0 |
0 |
|
|
|
Current Net Book Value |
0 |
0 |
0 |
0 |
|
Cumulative Depreciation |
|
|
0 |
0 |
|
Last Depreciation Period |
|
|
1 |
1 |
|
Last Depreciation Amount |
|
|
0 |
0 |
|
Last Depreciation Date |
|
|
1/31/2015 |
1/31/2015 |
|
Depreciation history record: 1/1/2015 — 1/31/2015; Transaction amount: 0 |
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