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Santosh Malviya updated OFBIZ-1586: ----------------------------------- Comment: was deleted > Implement more fixed asset depreciation (methods) > -------------------------------------------------- > > Key: OFBIZ-1586 > URL: https://issues.apache.org/jira/browse/OFBIZ-1586 > Project: OFBiz > Issue Type: Improvement > Components: accounting > Affects Versions: SVN trunk > Reporter: Santosh Malviya > Priority: Minor > Fix For: SVN trunk > > Attachments: ActivityDepreciation.patch > > > There are more 'depreciation methods' which are :- > (1) Activity Depreciation :- Activity depreciation methods are not based on > time, but on a level of activity. This could be miles driven for a vehicle, > or a cycle count for a machine. When the asset is acquired, we estimate its > life in terms of this level of activity. Assume the vehicle above is > estimated to go 50,000 miles in its lifetime. We calculate a per-mile > depreciation rate: ($17,000 cost - $2,000 salvage) / 50,000 miles = $0.30 per > mile. Each year, we then calculate the depreciation expense by multiplying > the rate by the actual activity level. > Formula - > depreciation = (purchase cost - salvage value) * (current reading - previous > reading) / expected life in distance unit > where > distance unit may be miles, kilometers, etc.... > and current reading and previous reading are reading of the distance meter or > distance count meter. > (2) Unit of Production Depreciation :- Units of production depreciation is > used for assets for which it is better to measure the life in terms of the > quantity of the resource you expect to extract from them, such as mines or > wells. For example, the production capacity of an oil well is the number of > barrels of oil you expect to extract from it. For machinery or equipment, you > measure the production capacity in terms of the expected total hours of use. > You can enter the production capacity as the expected total production or > expected total use. First, you enter the units of production depreciation > method, production capacity, and unit of measure. You then enter the > production each period to depreciate the asset according to actual use that > period. > Formula - > depreciation = (purchase cost - salvage value) * (Production for the Period ) > / expected production capacity > where > Production for the Period = current production count - previous production > count -- This message is automatically generated by JIRA. - You can reply to this email to add a comment to the issue online.