Before Inflation Accounting application, companies used to re-evaluate for the purpose of evaluating fixed assets subjected to depreciation over current currency unit due to decreases in purchasing power and reflect the difference of this evaluation to balance sheet properly. However, since it is possible to adjust a tangible fixed asset according to general price level thanks to inflation accounting applications, before adjusting any tangible fixed asset according to inflation accounting, re-evaluation increases that are added to the cost of the relevant asset must be deducted. Otherwise double evaluation transaction and incorrect adjustment results will come into question.
Thereby an alternative depreciation table is added to existing depreciation tables in the application. This table has many of existing table parameters, yet it does not include re-evaluation transaction. When a fixed asset is re-evaluated, it will be possible to perform a table calculation in which re-evaluation increases will not be considered pursuant to inflation accounting.
Table parameters are:
- Depreciation Type: Normal/Declining
- Depreciation Rate
- Depreciation
- Salvage Value
- Partial Depreciation: Yes/No
Inflation Accounting Alternative Depreciation Table calculations can be performed over the relevant fixed asset record without considering evaluation parameters related to the fixed asset record.