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Depreciation on the basis of estimated revenue

former_member221515
Active Contributor
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     Hello Experts

I have requirement where depreciation should be calculated on the basis of estimated revenue.

I have one intangible assets. We have estimated some revenue out of that asset, over 5 years.

For Ex:

1st Year: Rs.100

2nd Year: Rs. 70

3rd Year: Rs. 55

4th Year: Rs.33

5th Year: Rs.24

Now I want to depreciate my asset (of Rs. 10 Lakhs) on above proportionate. Please note the estimation may change in between. For ex:

In 3rd year, revenue estimation changes to:

3rd Year: Rs. 52

4th Year: Rs.35

5th Year: Rs.18

Please let me know, how can I achieve this.

--

Deepak

Accepted Solutions (0)

Answers (4)

Answers (4)

Former Member
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Deepak, use unit of production. the only caveat is that you must be able to estimate your revenue on a monthly basis as depreciation is calculated monthly unless you set up different periodic units. As your revenue are estimated, you can also estimate monthly revenue by dividing yearly revenue by 12. Then using the uop feature, enter your total annual n-years expected revenue (which you already have), then enter calculated monthly revenue. You can change this on any nth year that you wish. Then run depreciation based on this.

please revert back with questions.

Regards,

sam

samsole.

MarkusBredel
Employee
Employee
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Hi Deepak,

to me this looks very similar to the depreciation method "unit of production", you should have a look at this.


UoP depreciation can be realized by either depreciation (number of) units in relation to a total number of units or remaining number of units. There is a configuration in which you maintain these variables. Replace the term "units" with "Rs" and this should cover your requirement.

Regards,

Markus

former_member221515
Active Contributor
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Any documentation or some link on how to UoP depn is configured and how it works?

--

Deepak

MarkusBredel
Employee
Employee
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Hi Deepak,

sure: http://help.sap.com


Cheers,

Markus

Former Member
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Hi Deepak,

First calculate % based on estimated revenue and enter as percentage in field in Multilevel method

Example Revenue 100 per annum for 5 years. So dep rate will be 20, so enter 20 in Multi level method.

Assume you calculated dep for 2 years and then estimated revenue is changed to 200 for Yr 3, 200 for yr 4 and 400 for yr 5.

GB-100000; Acc dep-40000; Net book value-60000.

So dep for Yr 3 should be 15000 [200/(200+200+400)*60000]

similarly    Yr 4 should be 15000

                 Yr 5 should be 30000

So the revised rate is 15 for Yr 3 & 4 and 30 for Yr 5. Update the revised rate in MLM it will recalculate depreciation.

Hope it is clear.

Regards,

G.Sethuraman

former_member221515
Active Contributor
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Formula

Asset Cost: Rs. 1 Lac

Estimated Revenue (for 5 years): 282 (adding all 5 years of revenue)

Revenue for 1st year: 100 Rs.

So depreciation for 1st year: 1 Lac * 100 / 282

In addition to this, each asset will have different estimated figures. Hence % cannot be fixed.

Former Member
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Hi Deepak,

Try grouping assets based on % dep rate and create that many depreciation keys.

If the groups are so many then manual depreciation is the last resort.

Regards,

G.Sethuraman

pankaj_pandey2
Active Contributor
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Hi Deepak

How the value 282 is being determined?

As per you scenario i think it can't be possible through standrad SAP functionality.

You can use BADI BADI FAA_EE_CUSTOMER to define your own criteria.

Regards

Pankaj P

former_member205041
Active Contributor
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Hello Deepak,

Is the multilevel method a solution for you?

That would mean a percentage for each year and you could use the depreciation key for several assets.

If this is absolutely individual there is only manual depreciation.

best regards Bernhard

former_member221515
Active Contributor
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Hello Mr. BK

These percentages are not fix. In manual depreciation, I believe, I will have to calculate depreciation amount outside SAP.

This will not be acceptable. Any solution through work around or ABAP or user exit / enhancement.

--

Deepak

former_member351125
Contributor
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Can you please provide the formula for your depreciation calculation?

former_member221515
Active Contributor
0 Kudos

Formula

Asset Cost: Rs. 1 Lac

Estimated Revenue (for 5 years): 282 (adding all 5 years of revenue)

Revenue for 1st year: 100 Rs.

So depreciation for 1st year: 1 Lac * 100 / 282

So % cannot be fixed