Solution Properties
Solution ID:
221924950016868
Last Modified Date:
Thu Oct 15 18:56:21 UTC 2026
Taxonomy Path:
Category//Transactions//Calculations
Author:
sageadmin
Fully depreciate an under-depreciated asset
Description
Cause

Straight-line and table depreciation methods calculate depreciation using Acquisition Value and Estimated Life, or IRS table percentages.

Critical depreciation changes can reduce Accumulated Depreciation or shorten Estimated Life. These changes can cause an asset to remain under-depreciated. 

The RV (Remaining Value) depreciation method uses the asset's Net Book Value at the Beginning Date and depreciates it over the Remaining Life. This method helps fully depreciate under-depreciated assets on time, but generally requires adjusting the estimated life. 

Use the Depreciation Adjustment report under Reports > Standard Reports to find under-depreciated assets.

Resolution

 NOTE: Use the Manual Method if the asset is using a bonus method. For example MACRS (MA), Straight-line full month (SB). The Remaining Value (RV) method doesn’t allow for a 168k election amount. 
 There are two ways to adjust an asset that has run out of life but still has Net Book Value. The Calculated Method and the Manual Method. Use the Calculated Method if you need a Depreciation This Run value. 

Calculated Method

  • This method includes the adjusted amount in Depreciation This Run.
  • Calculate the exact Estimated Life from the Placed-in-Service Date to the Beginning Date.
  • Use RVEstLifeCalculator.xlsx to confirm the correct Estimated Life.
  • This method will include the adjusted amount in Depreciation This Run.
  • For this method to work:
    • Calculate Estimated Life from the Placed-in-Service Date to the Beginning Date.
      Then add the desired Remaining Life for each asset.
    • Use the RVEstLifeCalculator.xlsx to ensure you have the correct Estimated Life.
  • Before you change values, confirm the asset’s Current Through Date is at least one period earlier.
    Make sure it’s before the date you want to depreciate the asset fully.
  • If it isn’t, depreciate the asset to the prior period first. See How to run depreciation on a specific asset.
  • If several assets share the same Placed-in-Service month, use Bulk Edit. Change the Estimated Life and Depreciation method for all at once.
  •  See How to perform Bulk Edit of Critical Depreciation Fields.

Asset-by-asset basis - Calculated Method

  1. Change the Depreciation Method to RV (Remaining Value over Remaining Life).
  2. Answer Yes, Current Thru Date to the questions.
  3. Change Estimated Life to cover the time from the asset’s Placed-in-Service Date to the Beginning Date.
    Add the desired Remaining Life so the asset fully depreciates.
  4. Answer Yes, Current Thru Date to the questions.

Example

  • Placed-in-Service Date: 01/01/2018
  • Estimated Life: three Years
  • Beginning Date is 06/2022 after changing to the RV method
  • Desired End Date 07/2022
  • Make this asset end on 07/2022
  • Change the Life to 0407 (four years seven months)
  • Notice the extra month included in the final Estimated Life
     (Placed-in Service date through the Beginning Date plus one month)

Manual Method

  • This method will NOT show the adjusted amount in Depreciation This Run. Adjust the General Ledger manually
  • This method will force the Current Accumulated Depreciation and the Current YTD. It will also fully depreciate the assets

Asset-by-asset basis - Manual method

  1. Beginning Date: Date desired to show the item as fully depreciated. This could be the current period or any other date.
  2. Beginning YTD: Current Net Book Value + Current YTD (if any). This is to ensure the Prior Accum amount remains correct after the change.
  3. Beginning Accum: The full Acquisition Value of the asset.

For assistance in calculating the Estimated Life, download the RVEstLifeCalculator.xlsx

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