on 07-24-2014 6:20 AM
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
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.
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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
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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
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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
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