Depreciating by Units of Measure

accfactNew features from Assetware Technologies

In an accounting framework where the useful life of an asset has become one of the most important aspects in asset accounting, your asset management system must be able to accommodate calculations and transactions to accurately state the useful and remaining life of your fixed assets. The traditional straight line depreciation method may not be the best way to determine the depreciation value and accurate life for some assets.

Units of measure use a simple calculation to determine the correct depreciation for a specific period by taking the units used for the current period divided by the total units available. The result gives you a percentage of depreciation that was actually used in that period.  By using the usage percentage and applying this to a normal straight line calculation will deliver a much more accurate result for the monthly depreciation charge.

Using this method to measure depreciation, allows the user to accurately determine the depreciation on the usage. If an asset does not use any units in a specific month, the depreciation for that asset will be zero.Forecasting of the depreciation can be simulated by various factors like average usage over the last specified periods, fixed percentage or estimated remaining life.

Units of Measure from Assetware features:

Individual depreciation based on actual use of Asset.
Multiple assets can be depreciated on the same Production
/Life Plan. No asset utilisation in production will result in no
depreciation charges.
Accurate depreciation measuring method.
Life of Mine depreciation accommodated using this model.
Forecasting of estimated units used in future periods.

Example of Units of Measure Plan