Former Member

# Smoothing method

What is the use of smoothing method and cath up methods where we use

I will assign points

Thanks

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• Former Member
Posted on Jun 18, 2008 at 10:30 PM

Smoothing and catch up method set up in posting rules for depreciation posting for a depreciation area.

For example based on dep key,

Depreciation for each period is Rs.100,

Total periods in a year : 12

Asset is created in period 1.5.2008 and

ordinary depreciation start date from the 1.1.2008

when you select smoothing method entire depreciation for the fiscal Rs.1200 is divided by 8 periods (including 5th period) and posts Rs.150 each for all the periods 5 to 12.

ie. (Total depreciation - Depreciation already posted)/ No of periods including current period

((100*12) - 0)/(12-4)= 1200/8= 150 for each period

In catch up method, Depreciation posted as below:

((100*5)-0) = 500 is posted in current period and in remaining periods, it will post Rs.100 per period as it is.

I hope you understood the concept

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• Former Member
Posted on Jun 18, 2008 at 09:50 AM

Hi,

Forecasting is the first step in the requirements planning cycle. Smoothing is one of the forecasting methodologies that can be used to forecast need at the location/article level.

Types/levels of smoothing:

- Simple exponential smoothing (constant model)

- Linear exponential smoothing (trend model)

- Seasonal exponential smoothing (seasonal model)

- Trend seasonal exponential smoothing (multiplicative seasonal component- Winter/Holt model)

- Trend seasonal exponential smoothing (additive seasonal component- Winter/Holt model)

- Linear regression (ordinary least squares) All forecast strategies are based on statistical forecast procedures and, therefore, on forecast models that mathematically qualify the period of historic data. The exponential smoothing methods (exponentially weighted moving average) are currently the most widely used time series methods. In addition, many clients create their own forecasting methods using user exits. These forecasts can then be used to drive replenishment as well as update other planning modules.

Smoothing algorithms provide a means of identifying significant patterns in sets of orientated data, eliminating local perturvations within the observations and predicting patterns of orientated data in places which lack observations.

I hope it will help.

Regards,

Manju

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• Former Member
Posted on Jun 18, 2008 at 10:10 AM

this concept will come in asset accounting,

1.smoothing:if you select this button OAYR the depreciation posting program calculates the periodic depreciation to be posted by distributing the remaining depreciation is posted eqally to the remaining periods of the fiscal year.

2.catchup:In this method remaining depreciation is posted in one peiod.

still your not clear give me ur mail id i will send examples

Regards

Ramana

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• Former Member
Posted on Jun 19, 2008 at 06:49 AM

Hi Ramesh,

Really it is help full answer i will assign points to you, i have one more doubt

I have scenario like this

clint has purchased asset in 2005 use ful life is 8 years dep calculated till 31.03.2007 now client is chanign dep method from declining blance to slm

and he wanted to reduce use full life also from 8 years to 6 years is it possible how can i apply smoothing method or how sap reacts

Thanks

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• Former Member

It is better to check in Quality system before doing in Production system, we need to check impact of other settings also.

• Former Member
Posted on Jun 19, 2008 at 07:33 AM

Hi Ramesh,

It will calculate dep for 2008,2009,2010 but here life also changing from 8 yers to 6 years how sap will react

Ex: asset value is 80000 life is 8 years

3 years it has cal dep 30000 and client is reducingreasset life from 8 to 6 years

3 years alsredy completed

50000 should post in 3 years with different dep method is it possible?

Thanks

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• Former Member

Assuming APC value is 80000 and WDV dep rate 20%, if you change the dep terms in 4th year

Year WDV SLM Dep Posted/ Acc Dep

(8yrs) (6 Yrs) to be posted

1 16000 13333 16000 16000

2 12800 13333 12800 28800

3 10240 13333 10240 39040

4 8192 13333 13333 52373

5 6554 13333 13333 65707

6 5243 13333 14293 80000

7 4194 -

8 16777 -

80000 80000 80000

If you change the depreciation terms in the first period it will post as above.

other wise if you change in say, 4th period, for three period it will post (8192/12) =683*3 =2048 as per WDV

if you use smoothing option with new depreciation key it will post like this;

for total depreciation for the year is 13333

for each period depreciation will be posted after change during the current period is:

13333 -2048 =11285 /8 = 1411