Per year depreciation works fine for me, I have no doubt about my business financial position without the need for more regular depreciation calculation.
It also simplifies Manager’s coding requirements, only the documentation needs to be updated to reflect the “Depreciating Worksheet Calculation” is designed to support annual calculation of residual value depreciation (and an estimate of the part year depreciation at the start and end of an assets life).
It is also consistent with the leading Australian asset management software package prior to 2015 version 4.1 release when yearly calculation of depreciation was upgraded to daily calculation of depreciation. Interestingly they support many complex options but choose not to support non standard year lengths
What their code does is:
Calculate depreciation on every day except 29th February using
If straight line depreciation is selected:
BookValue-In-1-day = BookValue - PrimeValue x AnnualDepreciation / 365 If residual value depreciation is selected:
BookValue-In-1-day = BookValue x (1 - AnnualDepreciation) ^ (1/365) For calculation efficiency, over d depreciation (not 29 February) days the following mathematically equivalent formula are used
If straight line depreciation is selected:
BookValue-In-d-days = BookValue - PrimeValue x AnnualDepreciation x d / 365 If residual value depreciation is selected:
BookValue-In-d-days = BookValue x (1 - AnnualDepreciation) ^ (d / 365) Note supporting assets such as pooled assets where asset can be added or disposed of, requires dividing the user specified calculation period into intervals during which the asset pool is constant.
So just updating Managers documentation works fine for me but I thought several users wanted depreciation calculated over shorter periods.