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Former Member
Jun 01, 2014 at 12:08 PM

Change useful life of an Asset in Tax Area only

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Dear All,

I was asked for decreasing the asset useful life in tax area only.

in a way that the useful life would be half time than in the Book area.

The depreciation method is LINEAR.

The problem is that the change in depreciation is taking place as from now, and the total asset useful lifein the tax area does not match the demand.

For example-

  • Asset Useful life before change = 10 years

  • Depreciation Method= Linear

  • Asset Value before depreciation start=100 USD

  • After two years the Net Book Value is 80 USD, Accum depreciation is 20 USD (10 USD per year).

  • Now (After 2 years of depreciation has passed) we change Useful life to 5 years on Tax depreciation area only -

The reult : The system would depreciate 20 USD per year (instead of 10 USD),

and the asset would finish to depreciate after 4 years from now.

Since 2 years already over, now added 4 more years - meaning the useful life would be 6 instead of 5 according to the demand.

Could anyone advise how to change the useful life of an asset that would acquire my demand?

Meaning decreasing the total useful life of an asset in half in tax area only (only AA tables), so that the total useful life in tax area would acquire my demand?

Thank you in advance!