Under Depreciated Asset

Question

Hello, 
 We found an asset that was under depreciated. The depreciation method is set for SL and the estimated life was set at 1 year and 6 months. Why would this not be fully depreciated? It is an active asset. Thank you!

Delray · Answer

Hello Pam, 
 Under depreciated assets happen on the SL method because there is a Beginning Date (a manual override of depreciation) on the asset where the Beginning Accum is less than the amount the program would have calculated over the same period of time from the Placed-in Service date to the Beginning date. 
 The SL calculation is always Value over Life. If you put an incorrect Beginning Accum on the asset, the SL calculation cannot correct for that incorrect Accum. Which is why we always recommend using the RV method (Remaining value over Remaining life) is cases where an SL asset has a beginning date on it. 
 ~Delray

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