Depreciation key first year 50% + linear depr

[Former Member]

My dear SAP Guru's,

Problem description:

I have the following request for a depreciation key:

Example: Asset X bought on 1-6-2015 for 10000 with a lifespan of 5 years

Due to regulations we need to depreciate this as following:

Year 1:

50% of 10000 = 5000

+

(5000/5) / (6/12) = 500

Total depreciation year 1 = 5500

Year 2 till 5:

(5000/5) / (12/12) = 1000

Final year (remaining months):

(5000/5) / (6/12) = 500

Adjustments made:

I made the following multi level method:

Acq. year: 9999

Year: 1

Period: blank

Base value: 01 - Aquisition value

Percentage: 50

I have defined the following depreciation key:

Phase 1:

Base method: 0014 - Ordinary: explicit percentage (after end life)

Period control: 004

Multilevel method: My custom made multilevel method descriped above

Chnge. method: 2 - Changeover when net book value percentage is reached

Percentage: 50,1%

Phase 2:

Base method: 0011 - Ordinary: percentage from useful life

Period control: 004

Multilevel method: 001 - 0%

Test results:

With these settings I'm getting the following results, based on the example I gave (Aq. value = 10k, life span = 5 yr)

Year 1: depreciation is 5000 (so sap calculates the 50%)

Year 2: depreciation is 1250 (5000/4)

Year 3: depreciation is 1250 (5000/4)

Year 4: depreciation is 1250 (5000/4)

Year 5: depreciation is 1250 (5000/4)

Total: 10000

Desired results:

This is how it should be:

Year 1: depreciation is 5000 + 500 (50% + remaining months of the year)

Year 2: depreciation is 1000

Year 3: depreciation is 1000

Year 4: depreciation is 1000

Year 5 : depreciation is 1000

Year 6: depreciation is 500 (remaining 6 months)

Total: 10000

Question:

What adjustments do I need to make to get to my desired results?

Best regards,

Roeland Siemons

[ajaycwa1981]

Hi Roeland

I would disagree with the solutions prescribed above

This is a case of Special Depreciation. In India, we have a similar requirement, to charge 20% extra dep in the first year

You will have 2 phases in your Dep Key - One has Ord Dep and One as Special Dep

The Multi Level Method used in Special Dep will have Validity as 1 Year i.e. it is applicable only in the first year (Base Method 0014)

The MLM of Ord Dep will be based on Rem. Useful Life (Base Method 0011)

No CHANGEOVER needed in this case

I have done this in 2007, but am 100% sure it works

Regards

Ajay M

[alexandra_fischer]

Is this for Bonus Depreciation programs in USA ? OSS Note 505069 is giving examples for keys

[former_member198650]

Hi Roeland,

You can maintain the percentage as 55% instead of 50% in the multi level method of the depreciation key.

Regards,

Mukthar

[Former Member]

Hello Mukthar,

Thank you for your quick reply, I have tested your solution but it does not give my desired results. Your solution doesn't work because it messes up the linear depreciation of the following year and it messes up the calculation if I activate the asset in an other period then 06.

Your answer gives me the following depreciation:

Year 1: Depreciation = 5500 (this is correct for this particular situation)

Year 2: Depreciation = 1125 (4500 / 4)

Year 3: Depreciation = 1125 (4500 / 4)

Year 4: Depreciation = 1125 (4500 / 4)

Year 5: Depreciation = 1125 (4500 / 4)

With this calculation, it depreciates the asset within 4,5 years and not in 5 years.

It needs to depreciate 50% and calculate the remaining 50% as lineair depreciation over the life span.

So if the life span is 10 year the depreciation in the first year is:

50% of 10000 = 5000

+

(5000/10) / (6/12) = 250

Total first year: 5250

If I calculate with just 55%, it would give me a total depreciation of 5500 in the first year.

Hopefully this clarifies this a bit,

Best regards,

Roeland

[dareal_michael]

Roeland,

Use multi level method with Total percentage in concessionary period.So you will have 55% in the year 1 For 2- 5 years 10% each (65,75,85,95 per cents respectively to 100%) and 5% the 6th year.

This will give 5500 and 1000 each for the next 4 years and 500 for the last year.

please refer Multi-Level Method - Asset Accounting (FI-AA) - SAP Library.

Regards,

Dareal

[former_member198650]

Hi Roeland,

For remaining years, maintain the base amount as 01 and maintain percentage as 50% in the reduction in the multilevel method of the depreciation key. Or create a multi level method for 999 years and maintain base value as 01, maintain reduction rate as 50% and do not maintain any change over methods in the depreciation key. So when you calculate the depreciation system will post depreciation as per your calculation and remaining 50% depreciation post as unplanned depreciation in the first year.

Regards,

Mukthar

[Former Member]

Thank you all for your replies.

@Dareal; if i maintain those percentages I can only depreciate an asset over the life span of 5 years. But the life span of an asset varies from 5-30 year within our organisation. So this solution won't work for me.

@Mukthar; i've tried your solution but can't get it work. I currently have the following settings:

I have 1 depreciation key called: Z998, it has 2 phases:

Phase 1: Ord.depreciation - Other depreciation

              Base method: 0014 - Ordinary: explicit percentage (after end of life)

              Period control:  004 -  06/06/02/02

              Multilevel method: Z98 - Settings: acq. year: 9999 / Year: 1 / Period: blank / Base value: 01 /                Percentage: 50% / Rem. life: unchecked / Reduct.: blank

               Chnge.method: 2

               Change percentage: 50,1

Phase 2: Ord. depreciation - Straight line depreciation

               Base method: 0011 - Ordinary: percentage from useful life

               Period Control: 001 -  01/01/02/02

               Multilevel method: Z99 - Settings: acq. year: 9999 / Year: 999 / Period: 12 / Base value: 01 /                Percentage: blank / Rem. life: unchecked / Reduct.: 50%

                Chnge.method: blank

               Change percentage: blank

It calculates the depreciation as following. Aquisition value is 10k, life span for this particular asset is 5 years.

First year:     5000

second year: 1000

Third:            1000

Fourth:          1000

Fifth:             1000

Then it stops, so the net value is 1000 after the fifth year. It wont depreciate any further.

I think it stops because it reached the end of its life span after 5 years. If SAP calculates the straight line depreciation together with the 50% at the start of the life span, my problem will be solved. Any idea how to configure this?

Best regards,

Roeland

[former_member198650]

Hi Roeland,

Either you have to maintain the percentage for 1 year as 60% or post unplanned depreciation for that year.

Regards,

Mukthar