How is asset class depreciation calculated?

For each asset class you define, asset class depreciation is calculated by applying a set annual percentage rate to the average balance of the asset account where the assets in the asset class are stored.

Part 32 book

Each asset class is associated with a Part 32 (asset class) book and a unique asset account used solely for assets belonging to the asset class.

How is the average account balance calculated?

The average account balance is calculated by using the compute statement you assigned to the Part 32 book. Defining a compute statement for a Part 32 book

For example, you can use this formula to calculate the average account balance:

(beginning of month balance + end of month balance) / 2

How are the asset class depreciation rates used?

You must assign a depreciation rate for each asset classification that you need to track individually. The rates are set by each state's Public Utility Commission (PUC).

Note: Because the Part 32 book calendar must match the General Ledger company calendar, the number of depreciation periods is the same as the number of calendar periods.

The rates that you specify are annual percentage rates expressed as a decimal value. For example, 15 per cent is expressed as 0.15000. The depreciation calculation program calculates the period depreciation as follows:

(Average Asset Account Balance * Depreciation Rate) / Number of depreciation periods