Regarding the Depreciation profile method

Dear All,

Can anybody tell the difference between the calculation of depreciation for Straight line life remaining and Straight line service life


Straight line life remaining will give you depreciation over the remaining years, with an equal amount of depreciation each period.

The service life concept allows you to extend the life of an asset (for example by spending further money maintaining/upgrading it). What you can then do is extend the life of the asset and then add the upgrade cost to the asset. The net effect is you will typically reduce the periodic depreciation, but increase the duration of the depreciation (and naturally the life of the asset).

The service life can be useful to provide a more accurate asset value, particularly if you want to dispose of the asset.

The straight line will increase the annual depreciation value, and therefore decrease profitability - anyway, that’s a discussion for another forum !!!

hope this helps

Hi kryton,

Thanks for reply.

Hi Kryton,

Thanks for reply

Small clarity on the previously raised point

When we upgrade the cost of the asset does the depreciation periods would change automatically for depreciation service life or we need go to the fixed asset value model and change the depreciation periods manually.

Hi Kryton,

Thanks for the reply.

In this above said case when we add the value to the asset even if the depreciation method is of straight line then it is allowing me to change the depreciation periods in the fixed asset value model.