To correct worksheet for leap year change fixed asset depreciation rate by entering this formula into the rate field: Rate x 365/366. So for 20% rate: 20 x 365/366. Then do worksheet and save a copy of the worksheet in Folders tab as when you change the rates back the following year the worksheet report will change. Then from the worksheet create your depreciation entry. A very klunky workaround I admit.
What is your goal with this rate adjustment? Are you aware that it produces less depreciation in a 366day leap year than Manager would already calculate, which would already be slightly more than in a 365day regular year? Are you trying to drive leapyear depreciation back to the same amount as the notional annual rate would produce in a regular year, or did you have some other purpose in mind?
You posted this without explanation of what the method was intended to accomplish.

You are correct that the worksheet currently calculates an approximation of declining balance depreciation.

I agree calling the user specified annual depreciation â€śNominalâ€ť is not a useful concept.

The worksheet value is reasonably accurate at 365 or 366 days. It could be made exact by fudging the user specified annual depreciation rate by 365/365.25 or 366/365.25 depending if it is or isnâ€™t a leap year.

I would strongly advise not using it for time periods other that a year as it used a straight line approximation for each calculation. The resulting error becoming more prominent as you move away from 1 year calculation interval (try a 2 year interval). Batch created entries calculated in a spreadsheet is a better solution.
Before I answer this question please let me say this. The purpose of depreciation is to reasonably estimate the decline in value of a fixed asset for the purpose of annually allocating this against revenue. It is expected to be a realistic estimate but not to be exact. This is why in most cases there is either a gain or loss on disposal of the fixed asset. That said, it is generally not material (as in accounting terms) whether only 365 is used as the denominator in the calculations or the actual days in each year is used.
So, to come to the question, many users will have always used the actual days in the year as the denominator and this workaround suggestion gives them the option to continue to use this calculation method and use the Manager depreciation worksheet. Other users can choose not to use the workaround and that will not be a problem. Maybe if future improvements are made there may be an option for users to select which denominator they wish to use.
It is also, in my opinion, better to use actual number of days in the year as the denominator when using the Prime Cost Method, otherwise by the end of the estimated life of the asset it will be depreciated by more than its Prime cost if only 365 is used as the denominator in the calculations. e.g. Prime cost of asset $1M, depreciation rate 10%. In a nonleap year the asset will be depreciated $100,000. In a leap year it will be depreciated $100,273.97 so at the end of useful life it will be depreciated beyond its prime cost by either 2 x 273.97 or 3 x 273.97.
Yes, I know that the Depreciation worksheet is not meant to be used for Prime Cost method calculations, but there is a workaround for that also that I posted to this forum however it was deleted by @Tut
Yes, if the denominator has to be fixed, this would have the same effect as using the actual number of days in the year as the denominator but I see no reason why it canâ€™t be programmed to use the actual number of days in the year ( the numerator is presently programmed this way).
The workaround rate is only meant to be used in a leap year and reverted back in nonleap years.
Manager already uses 366 days in leap years. No workaround is needed to achieve that goal. This is prominently explained in the Guide about the worksheet.
See above. And, as you stated, the worksheet is not valid for this method of depreciation in the first place.
This is why I asked the question. There is no need for the workaround to accomplish this. It happens automatically. Use of your workaround will, in fact, reverse the effect you say you are trying to achieve.
No more argument from me. I am able to use the workarounds I have devised. I feel sure that there will be changes to the Depreciation worksheet at some stage in the future and so I donâ€™t feel the need to comment any further on this topic at this time.
Have a relaxing day everyone. Cheers!