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author's profile photo Former Member
Former Member

Depreciation

Dear All,

I have a problem with depreciation calculation.

Could you explain me which options should I use in Multilevel method for the following case.

1. Acquisition date : 10/2007 (Started depreciation from 11/2007), value 10,000$

2. Depreciation method : Straight-line depreciation.

3. Useful life : 4 year

4. Technical improvement : additional vale 10,000$(09/2011) , change useful life from 4 year -> 8 year

What I want to calculate

year . ...... . dep. value

2007Y ...... 417 (10,000$/4y/12m*2)

2008Y ...... 2,500 (10,000$/4y)

2009Y ...... 2,500 (10,000$/4y)

2010Y ...... 2,500 (10,000$/4y)

09/2011Y ...... 1,875 (10,000$/4y/12m*9)

10/2011Y ...... 638 ((208$ (NBV for 1st ACQ) + 10,000$) / 4Y / 12m*3)) -- Technical improvement

2012Y ...... 2552 ((208$ (NBV for 1st ACQ) + 10,000$) / 4Y)

2013Y ...... 2552 ((208$ (NBV for 1st ACQ) + 10,000$) / 4Y)

2014Y ...... 2552 ((208$ (NBV for 1st ACQ) + 10,000$) / 4Y)

2015Y ...... 1914

How many levels do I need for this case in multilevel method and what are the value for each level

(for example, Validity period in years, Validity period in months, Base value key, percent, rem.lif)

Thank you very much for you help in advance!

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    author's profile photo Former Member
    Former Member
    Posted on Nov 26, 2011 at 10:14 AM

    Hi

    It's an additional value of existing asset. So, no need to give the Useful life......etc. and it will take care of additional asset value and calculate the depreciation for the extended useful life from Period control method settings.

    Sridhara Rao D

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    • Former Member

      Thank you for your reply.

      However the useful life was expanded after tenical improvement (4year -> 8year) due to Capital expenditure.

      According to tax law, we have to do depreciation with the NBV of 1st acquisition + the additional value of existing asset

      for 4 years more as much as expanded useful life.

      The correct way

      10/2011Y ...... 208$ (NBV for 1st ACQ) + 10,000$(Additional value) / 4year / 12 month * 3 remained month)

      2012Y ...... 2552 ((208$ (NBV for 1st ACQ) + 10,000$) / 4year)

      2013Y ...... 2552 ((208$ (NBV for 1st ACQ) + 10,000$) / 4year)

      2014Y ...... 2552 ((208$ (NBV for 1st ACQ) + 10,000$) / 4year)

      2015Y ...... 1914 (remained value)

      However current depreciation key works differently.

      Current dep. key information.

      1) base method : 0007 (Ordinary: percentage from life (after end of life)

      2) decl-bal method : 001 (0.00x / 0.0000% / 0.0000%(

      3) prd cont : x01 (11/11/11/11)

      4) Multilev.method : 001 ( 0.0000%)

      Could you tell me how to do depreciation correctly!

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