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Total useful life and remaining useful life use as indivisible unit the calendar month while the calculation of planned depreciation has a precision of days.

This diference is to be considered import fixed assets and to understand how the planned depreciation is distributed along the sub periods of the fiscal year

Scenario:

The posting periods in Administration->System Initialization are defined as

Sub-Periods: month

No. of Periods: 12

Date From: 01.01.YYYY

Date To: 31.12.YYYY

The Company starts working with SAP Business One Fixed Assets Add-on on Fiscal Year 2010

The system of calculation selected in Administration->System Initialization->Company Details->Basic Initialization-> Depreciation calculation:Exact daily Basis (see notes 1010880 and 1020395)

 

The Company owns a Fixed Asset with the following specifications to be imported for fiscal year 2010:

Acquisition date: 15.05.2009

Start depreciation date: 15.05.2009

Acqusition and production costs (APC): 1200.00

Total Useful Life: 24 months

Depreciation type:

Method: Stright-line

Period Control for Acquisition: Pro Rata Temporis/Exact Daily Base

Calculation method: Net Book Value (NBV)/Remaining life

 Date NVBAcc. Depreciation Remaining Life  Dep.  Period
 15.05.2009 1200.00                 0.00                               24.00      375.00
 01.01.2010   825.00              375.00                             16.50     600.00
 01.01.2011   225.00             975.00                               4.50     225.00
 15.05.2011       0.00           1200.00                               0.00 

How do I have to enter my data in CSV file to import this Fixed Asset in Fiscal Year 2010?

Capitalization Date: 2009-05-15

APC: 1200.00

Depr Start date 01: 2009-05-15

Useful Life 01: 24

Remaining Life 01: 16

Because remaining life uses indivisible calendar months, system will not allow to enter 15.50 so we need to enter 16, as if the asset had started its depreciation on 01.05.2009

Ordinary Depr 01: 375.00  

(1200.00 * 7.5 )/24 = 375.00

 After import the asset how these data must be read?

(do notice that there are slight differences since in my pervious chart the calculations were done roughly aproximated while the system does its calculation with a precision of days)

For The Fiscal Year 2010:

Ther remaining useful life is displayed as 16 not 16.5

image

But the year values are correct, considering remaining useful life 16.5 (16.42) and not 16

image

 Depreciation of the period 2010 is 603.00

(825.00 * 12)/16.42 = 603.00 , similar to our chart  (825.00*12)/16.5 =600.00

Do notice as well that in the last fiscal year of useful life 2011 the useful life will be displayed as 4 while the depreciations will be posted for 5 months. The last depreciation in May 2011 is aproximatedly half of  the rest since it is roughly 14 days of May 2011 (half a month) 

image 

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IMPORTANT: WHEN USING MONTHLY BASE!

Do remember that if user has selected system of calculation 'monthly base' , then the depreciation start date must be set in the import file as first day of the month. As it would had happened if the asset had been entered in the system by the document 'Acquisition'

We can check the not desired effects, using the sample example but imported in a system with monthly base

For the fiscal year 2010 the depreciation of the period is 619.00 , menaing that the remaining useful life considered for calculation is 16 and not 16.5 as if the start date of depreciation was 01.05.2009

(825.00 *12)/16 = 618.75 (by the rounding annual values becomes 619.00)

image

On the other hand, the last year of useful life still will have a depreciation to be posted in the period of May (period 5)

Because the system is monthly base the depreciation for the year 206.00 will be evenly distributed during the months of useful life 41.20

 

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