HP 12C Instruction Manual page 4

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HP 12C Depreciation
Solution: Load the TVM registers with the relevant values and calculate the SOYD depreciation for the fourth year:
15000 $ 8 w 1100 M 4 fÝ
Answer: The amount of depreciation for the fourth year is $1,930.56.
Practice solving partial-year depreciation problems
In most cases, the acquisition date of an asset does not coincide with the start of the fiscal or tax year. In these cases,
the amounts of the first and last year's depreciation are computed as fractions of a full year's depreciation. Consider the
example shown in Figure 6.
When using the straight-line method, calculating partial-year depreciation is a matter of calculating depreciation fractions
related to the calendar year, because the amount of depreciation for each depreciation year is constant. In the diagram
shown in Figure 3, the amount of depreciation calculated with SL for the first calendar year is 2/3 of the amount of
depreciation for a full year, and for the fourth calendar year it is just 1/3 of it.
When using either DB or SOYD depreciation method, the depreciation fractions are the ones reflected by the fractions of
the depreciation years. The relationship between the calendar year and the depreciation year in the example shown in
Figure 6 for DB and SOYD depreciation methods is shown in the table below:
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# of months
4 8
Calendar
years
1
Depreciation
1
years
Calendar year Depreciation year
1 (May-Dec) 2/3 × year 1
2 (1/3 × year 1) + (2/3 × year 2)
3 (1/3 × year 3) + (2/3 × year 3)
4 (Jan-Apr) 1/3 × year 3
- 4 -
2 3 4
2 3
3-year life
Figure 5
Figure 6
Figure 7
HP 12C Depreciation - Version 1.0