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Administrator Guide
Last Updated: 2026-03-13
Reference: Depreciation Methods

Reference: Depreciation Methods

Workday-owned depreciation methods meet common tax and reporting requirements. You can also use rate schedules when:
  • No Workday-owned depreciation method fits your depreciation requirements.
  • You anticipate you'll need to reassess the amortization or depreciation of assets during their useful life.
In this table, the depreciable basis for an asset is the cost for the asset - the bonus depreciation amount - the residual value.
Depreciation Method
Description
Options
Declining Balance
Workday applies the annual depreciation percentage to the asset depreciable basis (during the first year) or net book value (during the subsequent years).
The depreciation expense is greater during the earlier years that the asset is in service, and declines in the subsequent years.
When the depreciation expense for a period brings the net book value under the
Depreciation Threshold
 +
Residual Value
, Workday fully depreciates the asset during this period.
  • Depreciation Percent
  • Depreciation Threshold
  • Depreciation Rate Basis
Declining Balance with switch to Straight Line
Each period, Workday calculates:
  • The depreciation amount from the straight-line method.
  • The depreciation amount from the declining balance method.
When the amount from the declining method is greater than the amount from the straight-line method, Workday applies the declining balance method.
When the amount from the declining method is less than the amount from the straight-line method, Workday uses the straight-line method for the remaining periods.
  • Depreciation Percent
  • Depreciation Rate Basis
  • Useful Life (Periods)
Rate Schedule
Each period, Workday applies the periodic rate from your rate schedule to the asset depreciable basis.
When you perform transactions on assets that modify the depreciation schedule, Workday creates a new rate schedule with a name that ends with (Workday-Created). You can't view, edit, or delete rate schedules that Workday creates directly. You can only modify these rate schedules through transactions on assets.
When you lengthen the useful life for assets, Workday adds periods with zero depreciation after the last period in the rate schedule.
When you shorten the useful life for assets, Workday adds the prorated depreciation expense from the periods that you remove to the periods after the transaction effective date.
When you suspend and resume depreciation on assets, Workday adds periods to the depreciation schedule to catch up the periods when you suspend the assets.
For historical assets, Workday resumes depreciation from the depreciation start date that you specify when you register the assets in Workday. Example: You register a historical asset with 6 periods of depreciation from another system. The first period that the asset depreciates in Workday, Workday applies the periodic rate from period 7.
To view rate schedules, run the
View Rate Schedules
 report.
  • Depreciation Rate Basis
  • Depreciation Convention
     as
    Current Period
  • Useful Life (Periods)
     as the number of periods in the rate schedule.
Straight Line
When the depreciation rate basis is
Periods
, Workday calculates the period depreciation expense as the asset depreciable basis divided by the number of periods in the useful life for the asset.
When the depreciation rate basis is
Number Of Days
, Workday calculates:
  • The daily depreciation expense as the asset depreciable basis ÷ the number of days in the useful life for the asset.
  • The period depreciation expense as the daily depreciation expense × the number of days in the period.
The rounding of depreciation expenses might cause slight variations between periods.
  • Depreciation Rate Basis
  • Useful Life (Periods)
Sum of Years Digits
Workday recognizes most of the depreciation in the earlier periods that assets are in service.
The sum of years' digits is the sum of the remaining years of useful life for each year.
Workday steps down the depreciation at the start of each fiscal year. When the first year of depreciation is a partial year, Workday adds the under-depreciated portion of the year to the subsequent years.
Example: You have an asset with 5 years of useful life and a depreciation convention of
Current Period
. You place the asset in service in January. The sum of years' digits is 5 + 4 + 3 + 2 + 1 = 15. The depreciation for the first year is 5 ÷ 15, or 33.33%, of the asset depreciable basis.
  • Depreciation Rate Basis
     as
    Periods
  • Useful Life (Periods)
Term
You can select this depreciation method for assets that you create from supplier contracts within or outside of Workday, including leased and intangible assets.
When assigning term depreciation to assets, either through asset book rules or when manually assigning accounting information, you must specify:
  • Contract start and end dates, for assets that you register from a supplier contract in Workday.
  • External contract start and end dates, for assets that you register manually.
Workday determines the useful life for assets based on:
  • The start and end dates on the supplier contract.
  • The number of days you suspend assets.
To calculate the period depreciation, Workday applies the calculations from the straight-line method.
When you want to continue depreciating assets that you migrate from an external system, we recommend that you use the straight-line depreciation method. Workday doesn’t enable you to register these assets in secondary asset books with term depreciation.
Depreciation Rate Basis