Most of our assets use the Double Declining Balance method of calculating depreciation.  We're seeing a discrepancy in the way ITP applies that method versus what we are accustomed to.  The difference we're seeing is how often monthly depreciation is recalculated.  ITP appears to be recalculating the monthly depreciation amount on a monthly basis which results in a decrease in the monthly depreciation each month.  We believe it is common to do the calculation on an annual basis and keep monthly depreciation flat for consecutive 12 month periods. 

Before raising this as an issue and asking for changes to the calculation, I wanted to get supporting (or contradicting) opinions from the community.   Are you using this depreciation method for your assets and is the monthly recalculation of the depreciation amount consistent with your accounting systems or would you rather see it changed (or be given an option to have the monthly depreciation amount change every 12 months) ?

Hey @George McElfresh is the annual depreciation amount calculated based on the asset's book value for the fiscal year or is the 12 months based on the in-service date? 

The depreciation should reset at the beginning of each fiscal year.  Sorry, my example might have suggested otherwise.  Please let me know if you have any questions or would like me to review any examples.

Does the following example accurately describe annual double declining? 

Asset Amount: $1,000,000
Useful Life: 3 years (36 months)
In-Service Date: 1/1/17
Purchase Date: 1/1/17

Annual Double Declining:

For an asset that goes into service on January 1 yes.  If it goes into service anywhere other than the first month of the fiscal year then things would look different...

If it went into service in Feb 2017, would the Accumulated Depreciation for 2017 be $611,111.16 ($55,555.56 * 11 months)? That would make the Book Value for FY18 start at $388,888.84.

Yes and then you'd see a small amount of depreciation trickle over into 2020.  Looks like you've got it !

Thanks for the feedback! We'll consider this idea for a future release!

I created an Idea for Annual Double Declining Depreciation Method to track its progress.