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Former Member
Mar 28, 2007 at 06:48 PM

Depreciation Key Configuration: Phases included

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We have a custom configured depreciation key: The following is the configuration of the key.

Dep./int Ph Base Meth Decl. bal. Prd cont Multilev meth Chnge meth Changeover%

Ord. dep 1 0007 001 006 044 5 0.0

Ord. dep 2 0017 001 008 044 0.0

I was wondering if anyone could explain how this key should work. I have gone through the SAP documentation of how a key is configured but it doesn't explain everything. From what I understand:

Base Method 7 is % from the useful life

Declining Balance: 0/0/0

006 is 03/03/03/03: 03 is pro rata at mid period

044: St Line with APC value

Change over method 5 says it should change to second phase when useful life is reached.

In the first phase I think: Depreciation = APC / expected useful life

Now suppose, the asset's useful life is 3 years and the asset does a subsequent acquisition before the useful life is reached, For instance the value of the new acquisition is 100 and only 4 periods remain in the useful life. According to this dep key config, the depreciation per period for the new acquisition value is calculated as 100/(3*12). So the remaining 4 periods of the useful life would be depreicated as $2.78 per period.

After the useful life, the asset has value in it. It goes on to the next phase. In the next phase, the config is as follows:

Base Method 0017: Ordinary immediate depreciation after end of life

Declining Balance: 0/0/0

008 is 01/06/02/02:

044: St Line with APC value

Doesn't (Base Method 0017: Ordinary immediate depreciation after end of life) mean whatever value is left would be written off/depreciated in the final period of the useful life? In our system, this key goes on to calculate depreciation for another 3 periods after the and of useful life and in the changover to the next phase period it calculates a positive value for the depreciation.

Depreciation key config gurus please explain the configuration of this key and questions that I have, it would be very highly appreciated.