calculation of depreciation and interest for a particular asset class

[Former Member]

Hi,

I have a problem with the calculation of depreciation and interest for a particular asset class. The assets are financial leases. The depreciation key defined is LEAS. The following are the attributes of this key:

Dep/int phase base met dec-bal prd cont mult lvl chn ov

Ord.depreciation 1 0011 001 006 001 5

Ord.depreciation 2 0002 001 003 003

Interest 1 0028 001 003 010

An example of an asset is:

Aquisition value: 1041552.71 (as migrated on 01.04.2007)

Ordinary dep already posted: 56243.88

Net book value: 985308.83

Scrap Value:729086.90

Useful life: 50 years

Expired useful life: 9 years 1 month

Remaining useful life: 40 years 11 months.

Depreciation start date: 28.03.1998

Interest calculation start date:30.03.1997

Depreciation calculated by the system:6261.83

Interest calculated in the year:15682.68

I'm not able to undersatnd on what basis the system calculated the interest. I will be thankful if anyone can help me resolve this. An early reply will be greatly appreciated as I'm facing major problems due to this issue.

[Former Member]

Hi Mahesh,

As per my analysis of the case the interest rates are as under

Acq. Year Int.Percent

9999 4 01 10.%

9999 7 01 5.%

9999 25 01 2.5%

9999 999 12 01 2.5%

As per this the Acquisition value less the Scrap Value Rs.312,465.00 @ 2.5% p.a will be Rs. 7811.64.

Based on the above you analyse for which period interest is calculated.

Hope it will help.

Regards,

Vijay