Depreciation calculation methods

When adding a new asset, choose from the standard methods described below.

handles the calculations automatically as you record the information for each asset.

MACRS

  • Handles 3-, 5-, 7-, 10-, 15-, 20-, 25-, 27.5-, 31.5-, and 39-year class lives.
  • Handles the straight-line method under alternate MACRS.
  • Supports the use of the Alternative Depreciation System.
  • Supports 150% declining balance over regular MACRS lives.
  • Handles shortened Indian reservation property lives.
  • Handles farm property depreciation.
  • Handles the calculation of the bonus depreciation under section 168(k) and 1400N.

ACRS

  • Handles 3-, 5-, 10-, 15-, 18-, and 19-year class life assets using either regular or optional straight-line methods.
  • When you take investment tax credit, allows you to elect reduced basis or reduced ITC with automatic ITC calculation.
  • Accounts for the partial or complete expensing of section 179 property.

Old law

  • Supports straight-line and 200/150/125% declining balance.
  • Automatically switches to straight-line method when advantageous. To turn this feature on or off, choose Setup > Options > Calculation tab and mark or clear the Continue declining-balance with no switch to straight-line checkbox.
  • Properly accounts for pre-1981 assets including additional first-year depreciation and salvage value.
  • Depreciates assets acquired or disposed of based on the following conventions: actual month of transaction, half year, or full year/no year.

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