BOP Program Statement 8563.08 § 8

assets classified as Building and Improvements and as Machinery

and Equipment (unless waived by the Controller) are to be

depreciated using the straight-line depreciation method.

a. To maintain consistency of depreciation rates between

locations, the following schedule is to be applied:

RATE LIFE RANGE NUMBER OF YEARS

NUMBER IN YEARS TO DEPRECIATE

- Less than 5 None

1 5 - 8 5 yrs

2 9 - 14 10 yrs

3 15 - 20 16 yrs

4 21 - 30 24 yrs

5 31 - 50 40 yrs

Note: When estimating useful life for internal use

software, refer to the guidance in Section 7.b. in

consultation with staff in the Management

Information Systems Branch.

• Rates 1, 2, and 3 generally are to be used for

equipment. Although most production equipment and

forklifts have a useful life of 10 years, some

equipment, such as heavy metal presses, may have a

longer depreciable life. Business Managers are to

consult the sources mentioned in Section 7.

• Rates 4 and 5 generally are to be used for buildings

and improvements. For example, a pole barn type of

warehouse may have a shorter life (i.e., 20-30 years)

than a more solid structural building with footings

(i.e., 40 years).

PS 8563.08

12/13/2001

Page 5

b. The Business Manager must use the table in Section 8.a. to

ascertain the number of years to depreciate an asset by

determining the life range in years for the asset.

Example: A press in a Metal Factory has a useful life of 12

years. Since the life range is between nine and 14 years,

the number of years to depreciate is 10. The useful life,

10 years, is to be entered into the Master Asset Record.

The Millennium system then calculates the monthly rate of

depreciation.