RTO Pro Help File

Income Forecasting Depreciation type

Income Forecasting Depreciation type

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Income Forecasting Depreciation type

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Income forecasting depreciation in RTO Pro is calculated as follows. The depreciation is calculated as a percentage of revenue paid on the inventory item. The percentage is calculated by taking the RBV (remaining book value) divided by the total contract amount for that item.

 

For instance if an item cost 400 and is new so RBV is 400 and the contract amount is 1600 the depreciation percentage is .25. So if the item has 100 revenue in a month the depreciation would be $25.00.

 

If the item is returned and re-rented the depreciation percentage is recalculated based on the new RBV and contract amount.

 

The actual revenue for the month is not used, instead the revenue since last depreciation was ran is used. If the depreciation is not run on the first of the month the revenue is broken down into the entire period from the last depreciation run date and the new run date. For instance if depreciation was last ran through 6-1-2009 and you run depreciation on 7-15-2009. If an item has $100 in new revenue on it the revenue to claim depreciation on for June would be $100 divided by 45 x 30 or $66.67. The remaining 33.33 revenue would be depreciated the next month

 

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