Re:I went the other way (Score 0)

I don't know what the IRS requires for amortizing equipment, but there is a form of amortization called "double declining balance" which may work better for computer equipment that loses so much of its value in the first year.

Here's how it works:
Divide 100% by the number of years you are spreading the cost over (in your case, 5 years)
so 100%/5=20%
Take that value and double it: 20%*2=40%
This is why they call it "double declining".

This is the value by which you calculate the current period amortization amount. It is useful for rapidly depreciating equipment because it allows you to "front-load" the schedule while paying out over the same time period.

Flat-line amortization (20% per annum):
Purchase price: $1000
1st year: $1000*20%=$200 cumulative=$200
2nd year: $1000*20%=$200 cumulative=$400
3nd year: $1000*20%=$200 cumulative=$600
4nd year: $1000*20%=$200 cumulative=$800
5nd year: $1000*20%=$200 cumulative=$1000

Compared to double-declining:
Purchase price: $1000
1st year: $1000*40%=$400 cumulative=$400
2nd year: ($1000-$400)*40%=$240 cumulative=$640
3rd year: ($1000-$640)*40%=$144 cumulative=$784
4th year: ($1000-$784)*40%=$86.40 cumulative=$870.40
5th year: $1000-$870.40=$129.60 cumulative=$1000

Hope this helps.