Depreciation Management¶
Module: Depreciation | Audience: Admin, Owner
Table of Contents¶
- Overview
- Depreciation Dashboard
- Asset Depreciation Detail
- Depreciation Calculation Method
- Setting Up Depreciation for an Asset
- Category-Level Defaults
- Depreciation Statuses
- Parameter Change History
- Master Data Used by This Module
Overview¶
AMS provides a straight-line depreciation engine that calculates asset depreciation based on purchase value, residual value, useful life, and depreciation rate. The module includes a dashboard for portfolio-level analytics and asset-level drill-down for individual depreciation history.
Depreciation Dashboard¶
Path: Sidebar → Depreciation | URL: /depreciation/dashboard
The dashboard displays portfolio-wide depreciation metrics:
| Widget | Description |
|---|---|
| Total Assets | Count of assets with depreciation configured |
| Active Assets | Assets currently depreciating (status = Active) |
| Fully Depreciated Assets | Assets that have reached their residual value |
| Total Net Book Value (NBV) | Sum of current NBV across all assets |
| Total Accumulated Depreciation | Sum of all depreciation to date |
| Monthly Depreciation Trend | Line chart showing depreciation amounts over time |
| Depreciation by Category | Breakdown of depreciation by asset category |
| Depreciation by Location | Breakdown of depreciation by asset location |
| NBV Distribution | Distribution chart of net book values across assets |
Asset Depreciation Detail¶
Path: Depreciation Dashboard → Select Asset | URL: /depreciation/asset/:assetId
The individual asset view shows:
| Section | Content |
|---|---|
| Current Values | Current NBV, accumulated depreciation, depreciation rate |
| Depreciation Parameters | Start date, expected end date, residual value, rate |
| Calculation History | Table of all depreciation calculations with dates and amounts |
| NBV History | Chronological NBV changes with calculation details |
| Parameter Change History | Log of all depreciation parameter modifications (rate changes, revaluations) |
Depreciation Calculation Method¶
AMS uses the straight-line method:
Annual Depreciation = (Purchase Value − Residual Value) × (Depreciation Rate / 100)
Daily Depreciation = Annual Depreciation / 365
Period Depreciation = Daily Depreciation × Elapsed Days
Accumulated Depreciation = Sum of all Period Depreciation amounts
Net Book Value (NBV) = Purchase Value − Accumulated Depreciation
Stopping Condition: Depreciation stops when NBV reaches the Residual Value. The system sets residual_value_reached = true and no further depreciation is calculated.
Calculation Example¶
| Parameter | Value |
|---|---|
| Purchase Value | $100,000 |
| Residual Value | $10,000 |
| Depreciation Rate | 20% |
| Annual Depreciation | ($100,000 − $10,000) × 20% = $18,000 |
| Daily Depreciation | $18,000 / 365 = $49.32 |
| Year 1 NBV | $100,000 − $18,000 = $82,000 |
| Year 5 NBV | $100,000 − $90,000 = $10,000 (residual reached) |
Setting Up Depreciation for an Asset¶
Depreciation parameters are configured in Step 4 (Financial Information) of the asset creation wizard. See Asset Management — Step 4.
| Field | Type | Required | Validation | Notes |
|---|---|---|---|---|
| Depreciation Rate (%) | Number (percentage) | Yes (if section used) | > 0 and ≤ 100 | Annual depreciation rate as a percentage |
| Depreciation Start Date | Date | Yes (if section used) | Cannot be a future date; must be before Expected End Date | — |
| Expected End Date | Date | Yes (if section used) | Must be after Depreciation Start Date | — |
| Residual Value | Currency (amount) | No | ≥ 0 | Currency amount — not a percentage (see note below) |
| Depreciation Status | Dropdown | No | Active, Inactive, Completed | — |
| Accumulated Depreciation (Opening Balance) | Currency (amount) | No | For imported assets with existing depreciation | — |
% vs. Currency: Depreciation Rate is always a percentage. Residual Value at the asset level is always a currency amount. At the category level, Default Residual Value is set as a percentage of purchase price, which is then converted to a currency amount when pre-populating the asset.
Category-Level Defaults¶
Asset categories can define default depreciation settings (see Master Data — Asset Categories):
| Category Setting | Type | Required | Effect |
|---|---|---|---|
| Default Depreciation Rate (%) | Percentage | Yes | Pre-populates the annual depreciation rate when creating an asset in this category |
| Default Useful Life (Years) | Integer | Yes | Pre-populates expected end date calculation |
| Default Residual Value (%) | Percentage | Yes | Entered as a percentage of purchase price (e.g., 10 for 10%). When an asset is created, this percentage is converted to a currency amount based on the asset's purchase value. |
Tip: Configure category defaults to reduce manual entry and ensure consistent depreciation policies across similar assets.
Depreciation Statuses¶
| Status | Description |
|---|---|
| Active | Asset is currently being depreciated |
| Inactive | Depreciation paused (e.g., asset under major repair) |
| Completed | Asset has reached its residual value or expected end date |
Parameter Change History¶
Every change to an asset's depreciation parameters is tracked:
| Tracked Field | What's Recorded |
|---|---|
| Depreciation Rate | Previous and new rate |
| Depreciation Start Date | Previous and new start date |
| Expected End Date | Previous and new end date |
| Residual Value | Previous and new value |
| Accumulated Depreciation Opening Balance | Previous and new balance |
| Change Reason | Free-text explanation |
| Changed By / Changed At | User and timestamp |
This audit trail supports compliance and financial reporting requirements.
Master Data Used by This Module¶
| Master Entity | Where Used | Purpose |
|---|---|---|
| Asset Categories | Category-level defaults | Pre-populate depreciation parameters |
| Assets | Financial info section | Source of purchase value and depreciation parameters |
Related: Asset Management · Asset Disposal · Reports