MACRS Table Periodic

yearly depreciation = yearly depreciation percentage * cost 

depreciation for each period = yearly depreciation amount / periods in year
			 

Example of MACRS Table Periodic

• Year One

Your company uses a conveyor with a cost of $10,000, a life of five years, and a in-service date of January 1, 2001. Management decides to depreciate it under the MACRS 200% declining balance method with a half year averaging convention. LN uses the rate tables to determine the percentage used in calculating the annual percentage in each year.

In the first year, the rate is 20% and LN calculates depreciation as follows:

(20% * $10,000) = $2,000

LN then calculates the depreciation expense for each period in the year, without regard to the number of days in each period. For each period in the first year, LN performs the following calculation:

$2,000 / 12 = $166.67

LN divides this amount evenly from the in-service date to the end of the first fiscal year.

• Year Two

For the second year, LN uses the rate tables to determine that the rate for this year should be 32%. It calculates the yearly depreciation expense as follows:

(32% * $10,000) = $3,200

For each period in the second year, LN performs the following calculation:

$3,200 / 12 = $266.67

LN records a depreciation expense of $266.67 in each period of year two.