Depeciation Key Config Per 2017 US Tax Cuts with 168k Allowance

[zeekhan]

Hi SAP FICO Gurus, My requirement is to create a depreciation key which can calculate the below mentioned values.

Scenario Example:

1. Aquisition Value i.e 100000 usd

2. Per 168k allowance, First 30% Reduction need to happen. 100000 - 30000 =70000

3. First year Calculation: 70000 will be base depreciable Value.

4. Second year: 70000 - Accum Dep from year 1.

How can i achieve this?

If you can give step by step Config , that would be great help. Can i create Special Tax Depreciation in phase 1 with 30 % Reduction and phase 2 will be Ordinary deprecuation with Base value as Base value after Special tax depreciation. Or Some other Config?

[former_member601854 · Accepted solution]

You are on the right track.

Create depreciation key with Phase 1 Ordinary depreciation and Phase 1 Special depreciation.

Set-up ordinary depreciation as per your requirement (Base value is NBV).

Special depreciation must be Base Method Special: explicit percentage.

- Default the special depreciation start date to 1/1/YYYY where YYYY is acqusition year. You can do this via Period control method

- Multi-level method should be Acq yr: 9999, Year 1, Base Val 01, Percent 30.

And also adjust the configuration to calculate Special depreciation first before ordinary depreciation.

Thanks!

Jhero

[zeekhan · Accepted solution]

Hi Jay, I did the above mentioned Config.

1. I am able to see 3 Lines in Dep Calculation in AW01N, 1,12 and 24. Not sure, why i am seeing period 24 in FY?

2. Result is close enough, i am expecting 60000 in First year , Its giving me 58833. I might have to play around with period control i guess? Or am i missing anything?

3. Could we also do reduction in special dep phase 1, rather than percentage option. If yes, can ordinary config pick up the value of Special Dep after Reduction? That way when i run depreciation forecast its gana give me 10000 for Year 1. Not 60000. I want to show 50000 as a Reduced Acquisiyion value in my reports. For Tax Purposes.

I attached the screenshot below. Thanks a lot for your help.

dep-calc.png

[zeekhan · Accepted solution]

Hi Jay, How can i change the Period Factor as i mentioned in the below sceenshot for special tax depreciation through config?

If its 0.50000 then i would get 60000.

dep-calc-2.png

[zeekhan]

Hi, Issue Resolved for the Below Mentioned.

I Configured Special Tax Depreciation to Calculate 30% in Year 1 and Ordinary Depreciation will use the Remaining Value in Phase 1, Which is working fine.

i.e. Current year acquisition

100000 Acquisition Value Minus 30000 Special Tax Dep = 70000.

70000 will be Base Value for Ordinary Depreciation in Year 1.

Special Tax Depreciation is also Calculating Values for 2020. How can i limit it to Year 1 Only (First Year) ??

Config that i done: Multilevel in Special Tax Depreciation is > To Year Years Percentage

9999 1 30

Resolution:

Create a Multilevel Method for Special Tax Depreciation in Phase 1 with Below Mentioned Values:

Acq Year 9999 Years 1 Base Value 1 Percentage 30%

Special Tax Depreciation Config in Phase 1:

Base Method 0026 Dec Balance Method 001 Period Control 008 Multilevel Method (Above Mentioned)

I was using a different Period Control Method.

System will Calculate Ordinary Depreciation Per your Config after Special Tax Depreciation , Base Value will change to 70000 in My Case. Thanks all.

[former_member601854]

Period factor is determined by ordinary depreciation start date and asset value date of the postings.

If this is statisticla depreciation area, then you only need to run AFAR once you update ordinary dep start date.

If this data is from prior close fiscal year, then you need to open FA fixed asset year. There is an oss message to develop a custom program to open FA close fiscal year as OAAR can only open -1 year.

Thanks!

Jhero

[zeekhan]

Okay Thanks , Its working now. I Configured Special Tax Depreciation to Calculate 30% in Year 1 and Ordinary Depreciation will use the Remaining Value in Phase 1, Which is working fine.

i.e. Current year acquisition

100000 Acquisition Value Minus 30000 Special Tax Dep = 70000.

70000 will be Base Value for Ordinary Depreciation in Year 1.

Special Tax Depreciation is also Calculating Values for 2020. How can i limit it to Year 1 Only (First Year) ??

Config that i done: Multilevel in Special Tax Depreciation is > To Year Years Percentage

9999 1 30

Your input would be highly appreciated. Thanks Jay.