Depreciation Calculation Worksheet — Complete User Guide — Two Accounts Web

Comprehensive guide for the Depreciation Calculation Worksheet report — enabling, creating, reading, validating, and posting depreciation adjustments through it

Table of Contents

1. What Is the Depreciation Calculation Worksheet?
2. Prerequisites — Enabling via the Customize Menu
3. Navigating to the Report
4. The Report List
5. Creating a Worksheet — Field-by-Field
6. Report Output Columns
7. How the Worksheet Calculates Depreciation
   • 7.1 The 360-Day Convention
   • 7.2 Which Assets Are Included
   • 7.3 The Depreciation Methods
   • 7.4 Partial Period and Acquisition Date
   • 7.5 Opening Balance Anchoring
8. The Difference Column and Posting
   • 8.1 The "New Depreciation Entry" Action
   • 8.2 GL Posting of the Created Entry
9. Drilling Into Posted Depreciation
10. Sample Data and Report Output
    • 10.1 Sample Setup
    • 10.2 Report Output
    • 10.3 Calculation Verification
    • 10.4 Resulting Depreciation Entry
11. Reporting and Accounting Impact
12. Accounting Regulation Validation
13. Common Notes and Best Practices

1. What Is the Depreciation Calculation Worksheet?

The Depreciation Calculation Worksheet is a reconciliation and adjustment report for fixed-asset depreciation. For a date range that you choose, it:

• Recalculates the correct depreciation charge for every active fixed asset using the asset's own depreciation method, useful life, salvage value, acquisition date, and the 360-day accounting convention;
• Compares that recalculated figure against the depreciation that has actually been posted to the General Ledger in the same period (via Depreciation Entries);
• Shows the difference per asset and in total; and
• Offers a one-click New Depreciation Entry that books exactly the missing (or surplus) amounts, so the recorded depreciation is brought in line with the systematic calculation.

2. Prerequisites — Enabling via the Customize Menu

The report appears under Reports only when the Fixed Assets area is enabled for the business. Fixed Assets is not shown by default in a brand-new company.

How to Enable

1. Open the Customize Menu from the navigation bar (the hamburger / menu icon).
2. Turn on the Fixed Assets tab. (This also enables the Fixed Asset list, the Fixed Asset form, and the Depreciation Entries tab that this report relies on.)
3. Once enabled, the report is available under Reports → Fixed Assets → Depreciation Calculation Worksheet.

3. Navigating to the Report

From the main navigation bar:

1. Open Reports.
2. Go to the Fixed Assets category.
3. Click Depreciation Calculation Worksheet.

This opens the report list — every worksheet you have created (and saved) for the business appears here, sorted by its From Date.

4. The Report List

The list shows one row per saved worksheet, with three columns:

Each row is clickable:

• Click the row to open the worksheet output (the recalculated depreciation comparison).
• Edit opens the worksheet form to change the dates or description.

A New Report button at the top creates a fresh worksheet.

5. Creating a Worksheet — Field-by-Field

Click New Report to open the worksheet form. It contains three fields:

1. Enter a From Date and a To Date (the period must be a valid range).
2. Optionally enter a Description.
3. Click Save.
4. The report opens showing the worksheet output for that period.

6. Report Output Columns

The worksheet output opens with a subtitle:

For the period from {From Date} to {To Date}

One row is shown per included fixed asset (ordered by asset code/name), followed by a Total row. Four columns are displayed:

7. How the Worksheet Calculates Depreciation

7.1 The 360-Day Convention

All depreciation in the worksheet uses a 360-day accounting year with 30-day months. This is a standard accounting convention that makes partial-period calculations simple and consistent — every month is treated as 30 days, so a full year is always 360 days.

Days in a period = (Years × 360) + (Months × 30) + (End Day − Start Day + 1)

For example, 1-Jan to 30-Jun = 0 years × 360 + 5 months × 30 + (30 − 1 + 1) = 150 + 30 = 180 days.

7.2 Which Assets Are Included

For the selected period, the worksheet considers every fixed asset in the business and includes it only when:

• The asset has a valid useful life (more than zero years). Assets without a usable useful life are skipped.
• The asset has an acquisition (an acquisition posted to the Fixed Assets at Cost account) or an opening balance cost, and that acquisition date is on or before the period's To Date. Assets acquired after the period end are excluded.
• The asset was not disposed of before the period's From Date. Assets disposed during or after the period remain included (they are depreciated up to their disposal or to period end, whichever is appropriate).

7.3 The Depreciation Methods

Each asset carries a depreciation method. The worksheet applies the method exactly as configured:

The recalculated annual charge is then prorated for the period by the number of 360-days that fall inside the period.

7.4 Partial Period and Acquisition Date

If an asset was acquired (or its opening balance dated) during the reporting period, depreciation starts from the acquisition date, not from the period's From Date. If the asset was acquired before the period start, the full period is used. The calculation is built up year by year from the acquisition date through the period's To Date, and the total for the period is the accumulated depreciation at the period end minus the accumulated depreciation just before the period start.

7.5 Opening Balance Anchoring

When a fixed asset has an Opening Balance Accumulated Depreciation, the system treats that historical figure as a settled fact — it is not recalculated. The worksheet anchors at that figure and then calculates depreciation prospectively from the opening-balance date forward, using:

• The remaining book value (acquisition cost − opening accumulated depreciation), and
• The remaining useful life.

This is consistent with IAS 8 §14(a) — changes in accounting estimates are applied prospectively, not retrospectively. Assets acquired during the period without any opening balance are simply calculated from scratch using the full acquisition cost.

8. The Difference Column and Posting

8.1 The "New Depreciation Entry" Action

After the comparison is built:

• If any asset has a non-zero difference, a New Depreciation Entry button appears at the bottom of the report.
• If every difference is zero, the report instead shows the message "Nothing is required."

Clicking New Depreciation Entry opens the Depreciation Entry form pre-populated with:

• Date = the worksheet's To Date.
• Description = "For the period from {From Date} to {To Date}".
• One line per asset with a non-zero difference, where the line amount equals the asset's Difference.

You review the lines and click Save to post the depreciation adjustment. The positive differences increase depreciation (additional charge); negative differences reverse previously posted over-depreciation.

8.2 GL Posting of the Created Entry

Each line of the created Depreciation Entry posts two General Ledger transactions in the base currency:

Dr  [Depreciation Expense account]       Amount
Cr  [Accumulated Depreciation account]   Amount
                                          Sum: 0 ✓

Expense account resolution:

• If the asset has a Custom Depreciation Expense Account, that account is debited;
• Otherwise the system's default fixed-asset depreciation expense account is used.

Credit account resolution:

• Normally the Accumulated Depreciation balance-sheet account (or the asset's accumulated-depreciation control account) is credited;
• Exception: if the asset was already disposed before the entry date, the credit goes to the Gain/Loss on Disposal account instead.

9. Drilling Into Posted Depreciation

Clicking the Depreciation Entries amount in any row opens the depreciation transactions for that asset for the period. It lists every General Ledger transaction that:

• Was posted to the Accumulated Depreciation account (or the asset's accumulated-depreciation control account),
• Belongs to that specific fixed asset,
• Is not an opening-balance entry, and
• Falls within the worksheet's From–To date range.

This is where you inspect the actual posted depreciation that produced the "Depreciation Entries" figure — useful for tracing exactly why a difference exists (a missed entry, a wrong amount, a wrong date, etc.).

10. Sample Data and Report Output

For the first half of FY2026: 1-Jan-2026 to 30-Jun-2026.

10.1 Sample Setup

Depreciation already posted in the period (via Depreciation Entries):

10.2 Report Output

For the period from 1-Jan-2026 to 30-Jun-2026

10.3 Calculation Verification

FA-001 — Straight Line, 100,000, 5-year life:

Days in period (1-Jan to 30-Jun)  = 180  (5 months × 30 + 30 − 1 + 1)
Recalculated = 100,000 × 180 / (5 × 360) = 10,000.00  ✓ matches posted
Difference   = 10,000.00 − 10,000.00 = 0.00 ✓

FA-002 — Double Declining Balance, 500,000, 5-year life:

DDB rate  = 2 / 5 = 40%
Annual    = 500,000 × 40% = 200,000
Days      = 180 → recalculated = 200,000 × 180/360 = 100,000.00  ✓ matches posted
Difference = 100,000.00 − 100,000.00 = 0.00 ✓

FA-003 — Straight Line, 200,000, salvage 20,000, 3-year life, acquired 15-Jan-2026:

Depreciable base = 200,000 − 20,000 = 180,000
Days from acquisition (15-Jan to 30-Jun) = 166  (5 months × 30 + 30 − 15 + 1)
Recalculated = 180,000 × 166 / (3 × 360) = 27,666.67
Posted       = 24,900.00
Difference   = 27,666.67 − 24,900.00 = +2,766.67  → under-posted

FA-004 — Straight Line, 200,000, salvage 10,000, 4-year life, purchased 1-Mar-2026:

Depreciable base = 200,000 − 10,000 = 190,000
Days from acquisition (1-Mar to 30-Jun) = 120  (3 months × 30 + 30 − 1 + 1)
Recalculated = 190,000 × 120 / (4 × 360) = 15,833.33
Posted       = 0.00 (no depreciation posted for this asset yet)
Difference   = 15,833.33 − 0.00 = +15,833.33  → not yet depreciated

10.4 Resulting Depreciation Entry

Because the total difference is non-zero, clicking New Depreciation Entry opens a Depreciation Entry dated 30-Jun-2026 with the following lines:

On save, the system posts (in BDT):

Dr  Depreciation Expense                               18,600.00
    Cr  Accumulated Depreciation — FA-003                2,766.67
    Cr  Accumulated Depreciation — FA-004               15,833.33
                                            Total      18,600.00  ✓ DR = CR

After posting, the accumulated depreciation for FA-003 and FA-004 equals the recalculated figures, and re-running the worksheet for the same period would show "Nothing is required."

11. Reporting and Accounting Impact

The worksheet itself posts nothing — it only proposes a Depreciation Entry. The accounting impact comes from saving that entry:

• Profit & Loss (Depreciation Expense): The debit increases the period's depreciation expense, reducing net profit.
• Balance Sheet (Accumulated Depreciation): The credit increases accumulated depreciation, reducing the net book value of fixed assets (a contra-asset). Net fixed assets = Cost − Accumulated Depreciation.
• Cash Flow Statement: Depreciation is a non-cash charge; it is added back (indirect method) as a non-cash expense.
• Fixed Assets reports: The Fixed Asset Summary and the Fixed Assets listing reflect the updated accumulated depreciation after the entry is posted.

12. Accounting Regulation Validation

13. Common Notes and Best Practices

• Run the worksheet after posting acquisitions and disposals. New acquisitions add assets to the comparison; disposals taken before the period start remove them. Run the report after the accounting period's asset movements are complete.
• Use it as a period-end close control. A clean worksheet ("Nothing is required.") confirms every asset's depreciation in the GL matches the method-driven calculation.
• Review the Difference sign. Positive differences add depreciation; negative differences reverse excess — both are legitimate corrections the worksheet handles automatically.
• Check the method column. It shows the method used for the recalculation, so you can spot an asset accidentally configured with the wrong method.
• Keep worksheet dates aligned to your accounting periods. Use the same From/To as your reporting period (e.g. half-year or full-year) so the Difference reflects exactly the period's charge.
• Assets without a useful life or without an acquisition are not shown. If an asset is missing from the worksheet, confirm its useful life and that an acquisition/opening cost exists.

End of Depreciation Calculation Worksheet Guide