Hi,
Can I please know the purpose of using Alternative Estimated Life for depreciation.
![](https://uploads-eu-west-1.insided.com/ifs-en/attachment/d5dee300-967e-4d89-8f7e-d13b96b00b82.png)
Thank You,
L.K
Hi,
Can I please know the purpose of using Alternative Estimated Life for depreciation.
Thank You,
L.K
Hi
When calculating depreciation for fixed assets, the standard approach is to use the estimated life of the asset. However, there are scenarios where an alternative estimate might be more appropriate.
The alternative estimated life allows you to consider a different useful life for an asset, which may be based on factors other than the standard estimate. For example, if an asset’s actual wear and tear suggest a shorter or longer lifespan than the estimated life, you can adjust it using the alternative estimate.
The correct method for calculating depreciation based on alternative estimated life is typically either:
Ensure that the method parameter “Change base value” is set to “Depreciation period” to recalculate the net value each month1.
IFS provides the Change Net Value Option to modify the net book value when an asset’s useful life or salvage value changes after initial acquisition.
This feature allows adjustments to be made based on updated information about the asset’s condition or expected lifespan.
Best Regards,
Tharindu
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