diff --git a/erpnext/assets/doctype/asset/asset.js b/erpnext/assets/doctype/asset/asset.js
index 8287401..236c4f9 100644
--- a/erpnext/assets/doctype/asset/asset.js
+++ b/erpnext/assets/doctype/asset/asset.js
@@ -198,6 +198,19 @@
 				frappe.set_route("Form", doclist[0].doctype, doclist[0].name);
 			}
 		})
+	},
+
+	calculate_depreciation: function(frm) {
+		frappe.db.get_value("Asset Settings", {'name':"Asset Settings"}, 'schedule_based_on_fiscal_year', (data) => {
+			if (data.schedule_based_on_fiscal_year == 1) {
+				frm.set_df_property("depreciation_method", "options", "\nStraight Line\nManual");
+				frm.toggle_reqd("available_for_use_date", true);
+				frm.toggle_display("frequency_of_depreciation", false);
+				frappe.db.get_value("Fiscal Year", {'name': frappe.sys_defaults.fiscal_year}, "year_end_date", (data) => {
+					frm.set_value("next_depreciation_date", data.year_end_date);
+				})
+			}
+		})
 	}
 });
 
@@ -316,4 +329,4 @@
 		})
 	});
 	dialog.show();
-};
\ No newline at end of file
+};
diff --git a/erpnext/assets/doctype/asset/asset.json b/erpnext/assets/doctype/asset/asset.json
index 45c9a65..49b574d 100644
--- a/erpnext/assets/doctype/asset/asset.json
+++ b/erpnext/assets/doctype/asset/asset.json
@@ -513,6 +513,36 @@
    "bold": 0, 
    "collapsible": 0, 
    "columns": 0, 
+   "fieldname": "available_for_use_date", 
+   "fieldtype": "Date", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Available-for-use Date", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_bulk_edit": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
    "fieldname": "is_existing_asset", 
    "fieldtype": "Check", 
    "hidden": 0, 
@@ -1221,7 +1251,7 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 0, 
- "modified": "2017-12-19 12:58:44.137460", 
+ "modified": "2018-01-05 09:53:05.945328", 
  "modified_by": "Administrator", 
  "module": "Assets", 
  "name": "Asset", 
@@ -1277,4 +1307,4 @@
  "sort_order": "DESC", 
  "track_changes": 0, 
  "track_seen": 0
-}
\ No newline at end of file
+}
diff --git a/erpnext/assets/doctype/asset/asset.py b/erpnext/assets/doctype/asset/asset.py
index 8bba0b6..bd33a1b 100644
--- a/erpnext/assets/doctype/asset/asset.py
+++ b/erpnext/assets/doctype/asset/asset.py
@@ -5,7 +5,7 @@
 from __future__ import unicode_literals
 import frappe
 from frappe import _
-from frappe.utils import flt, add_months, cint, nowdate, getdate, today
+from frappe.utils import flt, add_months, cint, nowdate, getdate, today, date_diff
 from frappe.model.document import Document
 from erpnext.accounts.doctype.purchase_invoice.purchase_invoice import get_fixed_asset_account
 from erpnext.assets.doctype.asset.depreciation \
@@ -90,11 +90,15 @@
 		if self.next_depreciation_date and getdate(self.next_depreciation_date) < getdate(self.purchase_date):
 			frappe.throw(_("Next Depreciation Date cannot be before Purchase Date"))
 
+		if self.next_depreciation_date and getdate(self.next_depreciation_date) < getdate(self.available_for_use_date):
+			frappe.throw(_("Next Depreciation Date cannot be before Available-for-use Date"))
+
 		if (flt(self.value_after_depreciation) > flt(self.expected_value_after_useful_life)
 			and not self.next_depreciation_date and self.calculate_depreciation):
 				frappe.throw(_("Please set Next Depreciation Date"))
 
 	def make_depreciation_schedule(self):
+
 		if self.depreciation_method != 'Manual':
 			self.schedules = []
 
@@ -104,18 +108,51 @@
 			number_of_pending_depreciations = cint(self.total_number_of_depreciations) - \
 				cint(self.number_of_depreciations_booked)
 			if number_of_pending_depreciations:
-				for n in xrange(number_of_pending_depreciations):
-					schedule_date = add_months(self.next_depreciation_date,
-						n * cint(self.frequency_of_depreciation))
+				next_depr_date = getdate(add_months(self.available_for_use_date, 
+					number_of_pending_depreciations * 12))
+				if  (cint(frappe.db.get_value("Asset Settings", None, "schedule_based_on_fiscal_year")) == 1
+					and getdate(self.next_depreciation_date) < next_depr_date):
 
-					depreciation_amount = self.get_depreciation_amount(value_after_depreciation)
-					if depreciation_amount:
-						value_after_depreciation -= flt(depreciation_amount)
+					number_of_pending_depreciations += 1
+					for n in xrange(number_of_pending_depreciations):
+						if n == xrange(number_of_pending_depreciations)[-1]:
+							schedule_date = add_months(self.available_for_use_date, n * 12)
+							previous_scheduled_date = add_months(self.next_depreciation_date, (n-1) * 12)
+							depreciation_amount = \
+								self.get_depreciation_amount_prorata_temporis(value_after_depreciation,
+									previous_scheduled_date, schedule_date)
 
-						self.append("schedules", {
-							"schedule_date": schedule_date,
-							"depreciation_amount": depreciation_amount
-						})
+						elif n == xrange(number_of_pending_depreciations)[0]:
+							schedule_date = self.next_depreciation_date
+							depreciation_amount = \
+								self.get_depreciation_amount_prorata_temporis(value_after_depreciation,
+									self.available_for_use_date, schedule_date)
+
+						else:
+							schedule_date = add_months(self.next_depreciation_date, n * 12)
+							depreciation_amount = \
+								 self.get_depreciation_amount_prorata_temporis(value_after_depreciation)
+
+						if value_after_depreciation != 0:
+							value_after_depreciation -= flt(depreciation_amount)
+
+							self.append("schedules", {
+								"schedule_date": schedule_date,
+								"depreciation_amount": depreciation_amount
+							})
+				else:
+					for n in xrange(number_of_pending_depreciations):
+						schedule_date = add_months(self.next_depreciation_date,
+							n * cint(self.frequency_of_depreciation))
+
+						depreciation_amount = self.get_depreciation_amount(value_after_depreciation)
+						if depreciation_amount:
+							value_after_depreciation -= flt(depreciation_amount)
+
+							self.append("schedules", {
+								"schedule_date": schedule_date,
+								"depreciation_amount": depreciation_amount
+							})
 
 	def set_accumulated_depreciation(self):
 		accumulated_depreciation = flt(self.opening_accumulated_depreciation)
@@ -125,12 +162,13 @@
 			value_after_depreciation -= flt(depreciation_amount)
 
 			if i==len(self.get("schedules"))-1 and self.depreciation_method == "Straight Line":
-				depreciation_amount += flt(value_after_depreciation - flt(self.expected_value_after_useful_life),
-					d.precision("depreciation_amount"))
+				depreciation_amount += flt(value_after_depreciation -
+					flt(self.expected_value_after_useful_life), d.precision("depreciation_amount"))
 
 			d.depreciation_amount = depreciation_amount
 			accumulated_depreciation += d.depreciation_amount
-			d.accumulated_depreciation_amount = flt(accumulated_depreciation, d.precision("accumulated_depreciation_amount"))
+			d.accumulated_depreciation_amount = flt(accumulated_depreciation,
+				d.precision("accumulated_depreciation_amount"))
 
 	def get_depreciation_amount(self, depreciable_value):
 		if self.depreciation_method in ("Straight Line", "Manual"):
@@ -147,6 +185,21 @@
 
 		return depreciation_amount
 
+	def get_depreciation_amount_prorata_temporis(self, depreciable_value, start_date=None, end_date=None):
+		if start_date and end_date:
+			prorata_temporis =  min(abs(flt(date_diff(str(end_date), str(start_date)))) / flt(frappe.db.get_value("Asset Settings", None, "number_of_days_in_fiscal_year")), 1)
+		else:
+			prorata_temporis = 1
+
+		if self.depreciation_method in ("Straight Line", "Manual"):
+			depreciation_amount = (flt(self.value_after_depreciation) -
+				flt(self.expected_value_after_useful_life)) / (cint(self.total_number_of_depreciations) -
+				cint(self.number_of_depreciations_booked)) * prorata_temporis
+
+			return depreciation_amount
+		else:
+			self.get_depreciation_amount(depreciable_value)
+
 	def validate_expected_value_after_useful_life(self):
 		accumulated_depreciation_after_full_schedule = \
 			max([d.accumulated_depreciation_amount for d in self.get("schedules")])
@@ -178,7 +231,7 @@
 	def set_status(self, status=None):
 		'''Get and update status'''
 		if not status:
-			status = self.get_status()	
+			status = self.get_status()
 		self.db_set("status", status)
 
 	def get_status(self):
diff --git a/erpnext/assets/doctype/asset/test_asset.py b/erpnext/assets/doctype/asset/test_asset.py
index 76c46cf..07ed0ba 100644
--- a/erpnext/assets/doctype/asset/test_asset.py
+++ b/erpnext/assets/doctype/asset/test_asset.py
@@ -12,24 +12,25 @@
 class TestAsset(unittest.TestCase):
 	def setUp(self):
 		set_depreciation_settings_in_company()
+		remove_prorated_depreciation_schedule()
 		create_asset()
 		frappe.db.sql("delete from `tabTax Rule`")
 
 	def test_purchase_asset(self):
 		asset = frappe.get_doc("Asset", "Macbook Pro 1")
 		asset.submit()
-		
+
 		pi = make_purchase_invoice(asset.name, asset.item_code, asset.gross_purchase_amount,
 			asset.company, asset.purchase_date)
 		pi.supplier = "_Test Supplier"
 		pi.insert()
 		pi.submit()
-		
+
 		asset.load_from_db()
 		self.assertEqual(asset.supplier, "_Test Supplier")
 		self.assertEqual(asset.purchase_date, getdate("2015-01-01"))
 		self.assertEqual(asset.purchase_invoice, pi.name)
-		
+
 		expected_gle = (
 			("_Test Fixed Asset - _TC", 100000.0, 0.0),
 			("Creditors - _TC", 0.0, 100000.0)
@@ -46,10 +47,10 @@
 		asset.load_from_db()
 		self.assertEqual(asset.supplier, None)
 		self.assertEqual(asset.purchase_invoice, None)
-		
+
 		self.assertFalse(frappe.db.get_value("GL Entry",
 			{"voucher_type": "Purchase Invoice", "voucher_no": pi.name}))
-		
+
 
 	def test_schedule_for_straight_line_method(self):
 		asset = frappe.get_doc("Asset", "Macbook Pro 1")
@@ -66,14 +67,14 @@
 			for d in asset.get("schedules")]
 
 		self.assertEqual(schedules, expected_schedules)
-		
+
 	def test_schedule_for_straight_line_method_for_existing_asset(self):
 		asset = frappe.get_doc("Asset", "Macbook Pro 1")
 		asset.is_existing_asset = 1
 		asset.number_of_depreciations_booked = 1
 		asset.opening_accumulated_depreciation = 40000
 		asset.save()
-		
+
 		self.assertEqual(asset.status, "Draft")
 
 		expected_schedules = [
@@ -102,7 +103,7 @@
 			for d in asset.get("schedules")]
 
 		self.assertEqual(schedules, expected_schedules)
-		
+
 	def test_schedule_for_double_declining_method_for_existing_asset(self):
 		asset = frappe.get_doc("Asset", "Macbook Pro 1")
 		asset.depreciation_method = "Double Declining Balance"
@@ -120,7 +121,7 @@
 			for d in asset.get("schedules")]
 
 		self.assertEqual(schedules, expected_schedules)
-		
+
 	def test_schedule_for_manual_method(self):
 		asset = frappe.get_doc("Asset", "Macbook Pro 1")
 		asset.depreciation_method = "Manual"
@@ -145,6 +146,29 @@
 
 		self.assertEqual(schedules, expected_schedules)
 
+	def test_schedule_for_prorated_straight_line_method(self):
+		set_prorated_depreciation_schedule()
+		asset = frappe.get_doc("Asset", "Macbook Pro 1")
+		asset.is_existing_asset = 0
+		asset.available_for_use_date = "2020-01-30"
+		asset.next_depreciation_date = "2020-12-31"
+		asset.depreciation_method = "Straight Line"
+		asset.save()
+
+		expected_schedules = [
+			["2020-12-31", 28000, 28000],
+			["2021-12-31", 30000, 58000],
+			["2022-12-31", 30000, 88000],
+			["2023-01-30", 2000, 90000]
+		]
+
+		schedules = [[cstr(d.schedule_date), d.depreciation_amount, d.accumulated_depreciation_amount]
+			for d in asset.get("schedules")]
+
+		self.assertEqual(schedules, expected_schedules)
+
+		remove_prorated_depreciation_schedule()
+
 	def test_depreciation(self):
 		asset = frappe.get_doc("Asset", "Macbook Pro 1")
 		asset.submit()
@@ -172,23 +196,23 @@
 
 		self.assertEqual(gle, expected_gle)
 		self.assertEqual(asset.get("value_after_depreciation"), 70000)
-		
+
 	def test_depreciation_entry_cancellation(self):
 		asset = frappe.get_doc("Asset", "Macbook Pro 1")
 		asset.submit()
 		post_depreciation_entries(date="2021-01-01")
-		
+
 		asset.load_from_db()
-		
+
 		# cancel depreciation entry
 		depr_entry = asset.get("schedules")[0].journal_entry
 		self.assertTrue(depr_entry)
 		frappe.get_doc("Journal Entry", depr_entry).cancel()
-		
+
 		asset.load_from_db()
 		depr_entry = asset.get("schedules")[0].journal_entry
 		self.assertFalse(depr_entry)
-		
+
 
 	def test_scrap_asset(self):
 		asset = frappe.get_doc("Asset", "Macbook Pro 1")
@@ -283,7 +307,7 @@
 
 	if not frappe.db.exists("Item", "Macbook Pro"):
 		create_fixed_asset_item()
-	
+
 	asset = frappe.get_doc({
 		"doctype": "Asset",
 		"asset_name": "Macbook Pro 1",
@@ -341,6 +365,21 @@
 	company.disposal_account = "_Test Gain/Loss on Asset Disposal - _TC"
 	company.depreciation_cost_center = "_Test Cost Center - _TC"
 	company.save()
-	
+
 	# Enable booking asset depreciation entry automatically
-	frappe.db.set_value("Accounts Settings", None, "book_asset_depreciation_entry_automatically", 1)
\ No newline at end of file
+	frappe.db.set_value("Accounts Settings", None, "book_asset_depreciation_entry_automatically", 1)
+
+def remove_prorated_depreciation_schedule():
+	asset_settings = frappe.get_doc("Asset Settings", "Asset Settings")
+	asset_settings.schedule_based_on_fiscal_year = 0
+	asset_settings.save()
+
+	frappe.db.commit()
+
+def set_prorated_depreciation_schedule():
+	asset_settings = frappe.get_doc("Asset Settings", "Asset Settings")
+	asset_settings.schedule_based_on_fiscal_year = 1
+	asset_settings.number_of_days_in_fiscal_year = 360
+	asset_settings.save()
+
+	frappe.db.commit()
diff --git a/erpnext/assets/doctype/asset_category/asset_category.py b/erpnext/assets/doctype/asset_category/asset_category.py
index 5279c37..542bd12 100644
--- a/erpnext/assets/doctype/asset_category/asset_category.py
+++ b/erpnext/assets/doctype/asset_category/asset_category.py
@@ -12,4 +12,4 @@
 	def validate(self):
 		for field in ("total_number_of_depreciations", "frequency_of_depreciation"):
 			if cint(self.get(field))<1:
-				frappe.throw(_("{0} must be greater than 0").format(self.meta.get_label(field)), frappe.MandatoryError)
\ No newline at end of file
+				frappe.throw(_("{0} must be greater than 0").format(self.meta.get_label(field)), frappe.MandatoryError)
diff --git a/erpnext/assets/doctype/asset_settings/__init__.py b/erpnext/assets/doctype/asset_settings/__init__.py
new file mode 100644
index 0000000..e69de29
--- /dev/null
+++ b/erpnext/assets/doctype/asset_settings/__init__.py
diff --git a/erpnext/assets/doctype/asset_settings/asset_settings.js b/erpnext/assets/doctype/asset_settings/asset_settings.js
new file mode 100644
index 0000000..3b42148
--- /dev/null
+++ b/erpnext/assets/doctype/asset_settings/asset_settings.js
@@ -0,0 +1,5 @@
+// Copyright (c) 2018, Frappe Technologies Pvt. Ltd. and contributors
+// For license information, please see license.txt
+
+frappe.ui.form.on('Asset Settings', {
+});
diff --git a/erpnext/assets/doctype/asset_settings/asset_settings.json b/erpnext/assets/doctype/asset_settings/asset_settings.json
new file mode 100644
index 0000000..d6ddd33
--- /dev/null
+++ b/erpnext/assets/doctype/asset_settings/asset_settings.json
@@ -0,0 +1,175 @@
+{
+ "allow_copy": 0, 
+ "allow_guest_to_view": 0, 
+ "allow_import": 0, 
+ "allow_rename": 0, 
+ "beta": 0, 
+ "creation": "2018-01-03 10:30:32.983381", 
+ "custom": 0, 
+ "docstatus": 0, 
+ "doctype": "DocType", 
+ "document_type": "", 
+ "editable_grid": 1, 
+ "engine": "InnoDB", 
+ "fields": [
+  {
+   "allow_bulk_edit": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "depreciation_options", 
+   "fieldtype": "Section Break", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Depreciation Options", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_bulk_edit": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "schedule_based_on_fiscal_year", 
+   "fieldtype": "Check", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Calculate Prorated Depreciation Schedule Based on Fiscal Year", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_bulk_edit": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "default": "360", 
+   "depends_on": "eval:doc.schedule_based_on_fiscal_year", 
+   "description": "This value is used for pro-rata temporis calculation", 
+   "fieldname": "number_of_days_in_fiscal_year", 
+   "fieldtype": "Data", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Number of Days in Fiscal Year", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }
+ ], 
+ "has_web_view": 0, 
+ "hide_heading": 0, 
+ "hide_toolbar": 0, 
+ "idx": 0, 
+ "image_view": 0, 
+ "in_create": 0, 
+ "is_submittable": 0, 
+ "issingle": 1, 
+ "istable": 0, 
+ "max_attachments": 0, 
+ "modified": "2018-01-05 10:10:39.803255", 
+ "modified_by": "Administrator", 
+ "module": "Assets", 
+ "name": "Asset Settings", 
+ "name_case": "", 
+ "owner": "Administrator", 
+ "permissions": [
+  {
+   "amend": 0, 
+   "apply_user_permissions": 0, 
+   "cancel": 0, 
+   "create": 1, 
+   "delete": 1, 
+   "email": 1, 
+   "export": 0, 
+   "if_owner": 0, 
+   "import": 0, 
+   "permlevel": 0, 
+   "print": 1, 
+   "read": 1, 
+   "report": 0, 
+   "role": "System Manager", 
+   "set_user_permissions": 0, 
+   "share": 1, 
+   "submit": 0, 
+   "write": 1
+  }, 
+  {
+   "amend": 0, 
+   "apply_user_permissions": 0, 
+   "cancel": 0, 
+   "create": 1, 
+   "delete": 1, 
+   "email": 1, 
+   "export": 0, 
+   "if_owner": 0, 
+   "import": 0, 
+   "permlevel": 0, 
+   "print": 1, 
+   "read": 1, 
+   "report": 0, 
+   "role": "Accounts Manager", 
+   "set_user_permissions": 0, 
+   "share": 1, 
+   "submit": 0, 
+   "write": 1
+  }
+ ], 
+ "quick_entry": 1, 
+ "read_only": 0, 
+ "read_only_onload": 0, 
+ "show_name_in_global_search": 0, 
+ "sort_field": "modified", 
+ "sort_order": "DESC", 
+ "track_changes": 1, 
+ "track_seen": 0
+}
\ No newline at end of file
diff --git a/erpnext/assets/doctype/asset_settings/asset_settings.py b/erpnext/assets/doctype/asset_settings/asset_settings.py
new file mode 100644
index 0000000..e303ebd
--- /dev/null
+++ b/erpnext/assets/doctype/asset_settings/asset_settings.py
@@ -0,0 +1,9 @@
+# -*- coding: utf-8 -*-
+# Copyright (c) 2018, Frappe Technologies Pvt. Ltd. and contributors
+# For license information, please see license.txt
+
+from __future__ import unicode_literals
+from frappe.model.document import Document
+
+class AssetSettings(Document):
+	pass
diff --git a/erpnext/assets/doctype/asset_settings/test_asset_settings.js b/erpnext/assets/doctype/asset_settings/test_asset_settings.js
new file mode 100644
index 0000000..eac2c92
--- /dev/null
+++ b/erpnext/assets/doctype/asset_settings/test_asset_settings.js
@@ -0,0 +1,23 @@
+/* eslint-disable */
+// rename this file from _test_[name] to test_[name] to activate
+// and remove above this line
+
+QUnit.test("test: Asset Settings", function (assert) {
+	let done = assert.async();
+
+	// number of asserts
+	assert.expect(1);
+
+	frappe.run_serially([
+		// insert a new Asset Settings
+		() => frappe.tests.make('Asset Settings', [
+			// values to be set
+			{key: 'value'}
+		]),
+		() => {
+			assert.equal(cur_frm.doc.key, 'value');
+		},
+		() => done()
+	]);
+
+});
diff --git a/erpnext/assets/doctype/asset_settings/test_asset_settings.py b/erpnext/assets/doctype/asset_settings/test_asset_settings.py
new file mode 100644
index 0000000..75f146a
--- /dev/null
+++ b/erpnext/assets/doctype/asset_settings/test_asset_settings.py
@@ -0,0 +1,9 @@
+# -*- coding: utf-8 -*-
+# Copyright (c) 2018, Frappe Technologies Pvt. Ltd. and Contributors
+# See license.txt
+from __future__ import unicode_literals
+
+import unittest
+
+class TestAssetSettings(unittest.TestCase):
+	pass
diff --git a/erpnext/config/assets.py b/erpnext/config/assets.py
index 1001e94..73c1aee 100644
--- a/erpnext/config/assets.py
+++ b/erpnext/config/assets.py
@@ -13,6 +13,10 @@
 				{
 					"type": "doctype",
 					"name": "Asset Category",
+				},
+				{
+					"type": "doctype",
+					"name": "Asset Settings",
 				}
 			]
 		},
@@ -74,4 +78,4 @@
 				},
 			]
 		}
-	]
\ No newline at end of file
+	]
diff --git a/erpnext/docs/assets/img/asset/asset_prorated_depreciation.png b/erpnext/docs/assets/img/asset/asset_prorated_depreciation.png
new file mode 100644
index 0000000..d81699b
--- /dev/null
+++ b/erpnext/docs/assets/img/asset/asset_prorated_depreciation.png
Binary files differ
diff --git a/erpnext/docs/user/manual/en/asset/assets.md b/erpnext/docs/user/manual/en/asset/assets.md
index 6932c59..1a5ce86 100644
--- a/erpnext/docs/user/manual/en/asset/assets.md
+++ b/erpnext/docs/user/manual/en/asset/assets.md
@@ -50,6 +50,13 @@
 
 In the depreciation entry, the "Accumulated Depreciation Account" is credited and "Depreciation Expense Account" is debited. The related accounts can be set in the Asset Category or Company.
 
+If you are required to calculate the depreciation based on your Fiscal Year and prorated by the number of days left, select the corresponding option in "Account Settings".
+
+The system will automatically set the fiscal year end date as the next depreciation date and calculate the depreciation amount prorata temporis based on the Available-for-use Date (IFRS16)
+
+<img class="screenshot" alt="Asset" src="/docs/assets/img/asset/asset-prorated-depreciation.png">
+
+
 For better visibility, net value of the asset on different depreciation dates are shown in a line graph.
 
 <img class="screenshot" alt="Asset" src="/docs/assets/img/asset/asset-graph.png">