12.2 Calculating Depreciation of Server Hardware Cost
vRealize Business Standard calculates the yearly depreciation values of server hardware costs and then divides the value by 12 to arrive at the monthly depreciation. vRealize Business Standard uses the salvage value of zero dollars.
depreciable cost == original cost
vRealize Business Standard uses the maximum value between yearly depreciation of declining balance with the multiplied depreciation rate and yearly depreciation of a straight line over five years.
Yearly depreciation = Max(yearly depreciation of double-declining balance method, yearly depreciation of straight line method)
This is the yearly depreciation of double-declining balance method and yearly depreciation of straight-line method.
Table 6. Depreciation Methods
Method | Calculation |
Double-declining balance | Depreciation rate = 2 / number of depreciation years Yearly depreciation: In every year, except the last year of depreciation: Yearly depreciation = (original cost – accumulated depreciation) * depreciation rate In the last year of depreciation: Yearly depreciation = original cost – accumulated depreciation |
Straight-line method | Yearly depreciation = (original cost – accumulated depreciation) / number of depreciation years |
The depreciation period can be set to three or five years.