Underdepreciated Assets

If you entered a Beginning Date and a Beginning Depreciation amount that is less than the system calculates to be correct, the asset is considered underdepreciated. The application continues to correctly calculate as much depreciation as you would be entitled to for that asset for each subsequent year. However, because the application generally does not calculate depreciation beyond an asset's estimated life, the asset might remain on the books indefinitely with a net book value remaining unless you set an adjustment convention. There are a number of ways you can handle the adjustment, depending on which depreciation method you are using. For a description of the different options, see Depreciation Adjustment Options.