What is a Lapsing Schedule?

A lapsing schedule is a spreadsheet that lists the purchase date, depreciation, and other accounting actions related to a fixed asset. The intent of the schedule is to show the rate at which the book value of a fixed asset declines over time. This information is compared to the book value stated in a company's accounting records to see if they match; if not, and assuming that the spreadsheet is correct, an adjusting entry is needed to alter the book value figure. This schedule is useful for ensuring that fixed asset values are correctly stated in an organization’s accounting records.

A sample lapsing schedule appears in the following exhibit.

In the preceding exhibit, the beginning book value represents the ending book value from the immediately preceding period. Thus, the $20,000 ending book value for Year 1 becomes the beginning book value for Year 2. The depreciation expense in the exhibit is based on a straight-line depreciation calculation, so the same amount is charged to expense in each period. The amount of depreciation expense is cumulative, so it increases by $5,000 in each successive year. Finally, the ending book value is the beginning book value, minus the depreciation expense recognized within that period.