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Depreciation Defaults

Applying Book Defaults

Book Defaults Tab

Custom User Books

User Book Defaults

Entries on the Book Defaults tab on the Edit Company window affect the defaults in the Internal book and user-defined books. There you can specify the book that the user books should emulate or which depreciation method should be the default. If you do not specify these settings, the system does not emulate any book and defaults to the straight-line (SL) depreciation method.

The system determines the default settings for the book information fields as follows:

Business-Use Percentages and Their Effective Dates

If you chose a book to emulate on the Book Defaults tab on the Edit Company window, the system copies the default information from that book. If no book is to be emulated and if the user book's fiscal year-end date and short-year dates are the same as in the Tax book, the system copies the information from the Tax book. Otherwise, the system leaves the default of 100% business use.

Depreciation Method

By default, the system determines the depreciation method as follows:

  1. If you chose a book to emulate on the Book Defaults tab on the Edit Company window, the system copies the default depreciation method from that book.
  2. If you did not choose a book to emulate, the system uses the default depreciation method specified on the Book Defaults tab on the Edit Company window if it is valid for the asset's property type.
  3. If the default depreciation method is not valid for the property type, the system chooses the straight-line (SL) method if valid or the straight-line method with the same averaging convention as the method in the Tax book.

Estimated Life

By default, the system determines the estimated life as follows:

  1. If you chose a book to emulate on the Book Defaults tab on the Edit Company window, the system copies the default estimated life from that book.
  2. If you did not choose a book to emulate but did enter an ADS life for the asset, the system uses the ADS life from the Tax book as the default estimated life.

Section 179 or Bonus, Salvage Value, and Beginning Year-to-Date Depreciation Amounts

If you chose a book to emulate on the Book Defaults tab on the Edit Company window, the system copies the default information from that book. Otherwise, the system sets the value to zero. For more information, see Section 179/Bonus, Salvage Value, and Beginning Year-to-Date.