Concept: Bonus Depreciation Rules

Bonus depreciation rules enable you to apply an additional depreciation percentage during the first depreciation period of an asset.

You can define bonus depreciation rules only on nonaccounting books.

You can restrict the applicability of bonus rules to assets:

That you acquire or place in service during a given time period.

With given asset classes.

With given asset types.

In given locations.

Calculation

Workday calculates the bonus depreciation amount as:

Bonus depreciation amount = Bonus depreciable basis x Bonus depreciation percentage

Workday applies the bonus depreciation percentage to the:

Asset acquisition costs.

Post-acquisition cost adjustments with a transaction effective date either:

Before the asset starts depreciating.

In the first depreciation period of the asset, based on the depreciation convention on the asset.

You can specify a maximum depreciable amount for an asset with the Update Asset Book Configuration
web service.

This table illustrates how Workday calculates the bonus depreciation on an asset with these sample values:

Bonus depreciation percentage: 50.

Acquisition cost: 10,000 USD.

Date placed in service: 01/31.

Maximum bonus depreciation basis in the book: 16,000 USD.

Post-acquisition cost adjustments:

5,000 USD on 02/03.

2,000 USD on 07/15.

Depreciation Convention	Depreciation Start Date	Bonus Depreciable Basis (USD)	Bonus Depreciation (USD)
Half Year	07/01	16,000 Calculated as the minimum of: 10,000 + 5,000 + 2,000 = 17,000 16,000	8,000 Calculated as 16,000 x 50 / 100
Half Year Pro Rata	01/31	10,000 Calculated as the minimum of: 10,000 16,000	5,000 Calculated as 10,000 x 50 / 100
Mid-Month	01/16	10,000 Calculated as the minimum of: 10,000 16,000	5,000 Calculated as 10,000 x 50 / 100
Mid-Quarter	02/15	15,000 Calculated as the minimum of: 10,000 + 5,000 = 15,000 16,000	7,500 Calculated as 15,000 x 50 / 100