6.3 Asset Deprecation Flashcards
Describe depreciation schedules
reduce the value of an asset according to user-defined period thresholds
Benefit of depreciation schedules
provide a more accurate view of an asset’s current value
provide more information towards decision-making regarding an asset’s lifecycle
List the types of depreciation schedules
- Straight line (SL)
- Double declining (DDB)
Describe the straight line (SL) depreciation schedule
the expense is an equal amount each period
Describe the double declining (DDB) depreciation schedule
the expense is a percentage of the item’s cost
Describe what happens when a depreciation schedule is added to an asset
A depreciation expense is periodically allocated to the cost of an asset’s original purchase value.
How is rate determined?
user-defined period threshold
Types of period thresholds
- Date-based
- Usage-based
Describe date-based period threshold
can be calculated monthly, quarterly, semi-yearly, or yearly
Describe usage-based period threshold
can be calculated based on meter life-to-date intervals
How is a depreciation schedule added to an asset?
by using the depreciation related actions in the More Actions menu from the Asset application or by applying an asset template that contains a depreciation schedule.
It can also be inherited from rotating items during the receiving or invoicing process.
How can an asset’s depreciation schedule be modified?
After an asset has a depreciation schedule, it can be adjusted by using the Manage Depreciation Schedule dialog box, or it can be swapped with another asset in the Swap Depreciation Schedule dialog box.