About factor depreciation
Important
This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.
Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012
Factors are the percentages that are used to depreciate assets. When you set up a fixed asset depreciation profile and select Factor in the Method field in the Depreciation profiles form, you can set up progressive, digressive, or straight line depreciation:
If you select progressive depreciation, the amount of depreciation increases with each depreciation period.
If you select digressive depreciation, the amount of depreciation per period decreases over time.
If you select straight line depreciation, the depreciation is the same in each period.
The rules and examples that follow indicate how you can set up factors for each type of depreciation.
Note
When you select Factor in the Method field, the Factor field and the Interval field are displayed.
Progressive depreciation
The value in the Factor field is greater than (>) 50.
Example
The acquisition price is 100,000, the factor is 70, the service life is 10 years, and depreciation starts on January 1. The depreciation amounts and net book value amounts are shown only for the first six years of service life.
Year |
Period |
Depreciation amount |
Net book value amount |
|---|---|---|---|
1 |
December 31 |
307.69 |
99,692.31 |
2 |
December 31 |
1,447.21 |
98,245.10 |
3 |
December 31 |
3,104.50 |
95,140.60 |
4 |
December 31 |
5,150.21 |
89,990.39 |
5 |
December 31 |
7,522.95 |
82,467.44 |
6 |
December 31 |
10,184.06 |
72,283.38 |
Digressive depreciation
The value in the Factor field is less than (<) 50.
Example
The acquisition price is 100,000, the factor is 20, the service life is 10 years, and depreciation starts on January 1. The depreciation amounts and net book value amounts are shown only for the first six years of service life.
Year |
Period |
Depreciation amount |
Net book value amount |
|---|---|---|---|
1 |
December 31 |
56,080.43 |
43,919.57 |
2 |
December 31 |
10,665.70 |
33,253.87 |
3 |
December 31 |
7,156.22 |
26,097.65 |
4 |
December 31 |
5,538.06 |
20,559.59 |
5 |
December 31 |
4,579.89 |
15,979.70 |
6 |
December 31 |
3,937.36 |
12,042.34 |
Straight line depreciation
The value in the Factor field is equal to (=) 50.
In this case, the depreciation is the same in each period, and you should consider the implications of your choices in other fields, as described in About straight line service life depreciation.