How to Configure Custom Bonus Depreciation Methods in NetSuite

To implement a bonus depreciation method followed by a declining balance calculation, a custom depreciation method must be created in NetSuite. This approach allows for the initial bonus depreciation to be applied, with the remaining asset value then depreciated using a declining balance method.

1. Navigate to Setup > Fixed Assets > Depreciation Methods > New.

2. Define the custom depreciation method for the initial bonus depreciation. This method will calculate the bonus portion and set up the transition to the subsequent declining balance method.

3. Enter the specific formula for the bonus depreciation calculation. For example, custom formulas that may be used for an initial 50% bonus depreciation combined with declining balance principles could be:

(OC/2)+((OC/2)*(1.5/AL)) for a 150% declining balance basis

(OC/2)+((OC/2)*(2/AL)) for a 200% declining balance basis

*Note: These are examples of custom formulas and may not align with NetSuite's standard preconfigured 150DB and 200DB methods.

1. Set the 'End Period' for this initial bonus depreciation method to

2. This ensures the bonus depreciation is applied in the first period.

3. Configure the 'Final Period Convention' as 'Retain Balance'. This convention ensures that any remaining asset value after the first period is carried forward.

4. In the 'Next Depreciation Method' field, link this initial method to the subsequent depreciation method that will handle the remaining asset depreciation. This could be a standard NetSuite 150DB or 200DB method, or another custom declining balance method.