Mass Depreciation Calculation Within CORE

CORE calculates depreciation in the following way:

Composite assets are depreciated across all components based on the single set of asset specifics in the asset header of the composite asset.

Non-Composite assets are depreciated based on the component asset specifics in the component lines of the asset.

Depreciation is calculated using the following formula:

• Incremental Depreciation Expense = Annual Depreciation Expense * In Service Years

Where:

• Annual Depreciation Expense = Asset Depreciable Base/Residual Useful Life (in years)

• Asset Depreciable Base = Asset historical cost – salvage value – accumulated depreciation

• Residual Useful Life = Useful life – ((last depreciation date less the in service date)/(number of days in the calendar year))

• In Service Years = (depreciation date less the last depreciation date)/number of days in calendar year

Note: If the residual useful life < 0, then use zero in the calculation; If residual useful life = zero then annual depreciation = zero.

The current period’s depreciation can never exceed the asset’s depreciable base. If it does exceed the asset’s depreciable base, then the current period’s depreciation is set to equal the asset’s depreciable base.

All of the above are recalculated if there is a change in asset value, salvage value, and/or asset life. CORE does not allow a change of in service date once mass depreciation has been run on an asset.

If there is a perceived error in CORE’s depreciation calculation, common areas to consider are:

• Calculations using monthly or annual straight-line depreciation, rather than daily depreciation will calculate slightly different numbers as an output.

• Manual depreciation transactions were entered inaccurately (this is most common with long-term assets at conversion).

• There is a change to the asset’s value, salvage value or asset life.