August 18, 2020
New Feature - Depreciation
MAPCON 7.1 brings many new features, but none as exciting as depreciation. This feature has been in the works for a while, and we are proud to say it is finally available.
Depreciation is available in MAPCON Pro with the advanced administration module and is located within a piece of equipment in the system.
What is the depreciation feature within MAPCON used for?
Basically, depreciation is used to track the value or worth of an asset at any given time. It allows users to determine a few different things, such as whether it is more cost effective to keep and repair a piece of equipment, or replace it entirely.
Users can choose from a few different depreciation methods. The accounting department will most likely decide which method should be used:
- Straight line – The asset depreciates the same amount over time.
- Double declining balance – The asset depreciates at a higher rate in the first year of its’ life, then gradually decreases depreciation rate in the years following. Take the straight line method and multiply it by two.
- Double declining balance 1.25 – In this method, you multiply the straight line method by 1.25.
- Double declining balance 1.5 – This is calculated by multiplying the straight line method by 1.50.
- Sum of year’s digits – This method takes the expected life of the asset and adds together the digits for each year. Then, each digit is divided by that sum to determine the yearly depreciation percentage.
So, how do we use it in MAPCON?
The depreciation tab is found on the equipment screen. Once selected, you’ll need to put in the depreciation method first. As stated earlier, this generally comes from the accounting department. Once the date purchased and asset cost are entered, the depreciation rate, depreciated amount, current book value, and depreciation schedule are automatically populated. Entering the residual/salvage value and/or the life expectancy changes those items accordingly. The salvage value typically comes from the accounting department, and the life expectancy is determined by the manufacturer. These items can both be entered later if they aren’t known right away.
What about reports?
This new feature comes with two new reports – Depreciation by Equipment and Depreciation Schedule:
- Depreciation by Equipment – this report is more of a cost report. It shows exactly how a piece of equipment has or will depreciate over time. Users can easily see here if they are spending more on the asset than it’s actually worth, which helps determine when the asset should be replaced.
- Depreciation Schedule - this report allows users to look at how items will depreciate over time. If needed, users can add multiple assets to the report.
MAPCON 7.1 came with a number of new features, but depreciation is definitely one of the most important ones. To see a list of all the new features and enhancements, click here.