Related topics

Replacement Value: An Overview

Calculating Replacement Value

Setting Up Replacement Value

Replacement Value

The Replacement Value feature allows you to calculate an increase (or decrease) in the value of your assets. You determine an asset's Replacement Value by applying a yearly index to either its acquired value or to its prior year Replacement Value. You can use Replacement Value to account for a company's existing assets at the equivalent cost of buying the assets new today.

The Replacement Value feature includes the following three types of calculations:

  • Calculation of Replacement Value - An annual Replacement Value, calculated by applying a yearly index to either the Acquired Value or prior year Replacement Value.
  • Calculation of Depreciation on Replacement Value - A monthly and/or yearly depreciation amount calculated on the annual Replacement Value using straight-line depreciation and the full-month averaging convention.
  • Calculation of Interest on Replacement Value - An interest amount calculated either monthly, quarterly, or annually by applying an interest rate to a portion (either 100% or less) of the annual Replacement Value.