declining balance dep. key

[Former Member]

Dear Experts,

I am configuring asset module. In test phase for assets which I choose declining balance dep key, system wants me to enter useful life. But as far as I know in declining balance method, useful life is not necessary:

first year : Asset value* dep rate = depreciation for first year

second year :  ( Asset value -  depreciation for first year ) * dep rate =  depreciation for the second year

as you see, useful life is not a factor here. Could you please tell me what customizing step makes it mandatory to put useful life and how I can make it unnecessary for declining balance dep keys.

Regards,

[Former Member · Accepted solution]

Hi Rakesh,

You might have defined base method in AFAMA as % from useful life thats why system is asking to enter useful life.

Choose base method "0012-Ordinary-Explicit percentage" or other similar base methods.

And in T code AFAMS give the depreciation rate.

Hope it solves.

Regards,

G.Sethuraman

[Former Member · Accepted solution]

thanks Sethuraman, in AFAMS I have set base valus 24 as net book value and I have defined der rate. and for base method step I have set : P stated percentage rate as DEP method and in AFAMA I have assigned P stated percentage rate as DEP method.

But I have still the same issue. could you please tell me what the solution is

thanks,

[Former Member · Accepted solution]

Hi Rakesh,

It is better to clone standard WDV dep method and modify suitably to meet your requirement.

Sample Standard WDV dep is attached.

If you still find it difficult to trace the error, attach the screenshots of AFAMA and AFAMS.

Lets do it.

Regards,

G.Sethuraman

[Former Member]

Hi Rakesh

Useful life whether it is needed for calculation of your Declining Balance method or not is a required entry regardless screen layout control settings as per below note.

Planned useful life in years

Useful life (in years) over which the asset is to be used and depreciated.

Note

If a useful life is not entered in the asset class, and you use depreciation keys that calculate automatically, this field is a required entry regardless of the settings in the screen layout control.

Your depreciation keys settings will determine whether you will use this for determining depreciation rates, what to do after useful life expires (changeover method), etc. Most tax jurisdictions require company to identify useful life of each asset they own. The difference between useful life determined by company and tax office might result in deferred tax.

Regards

Ferdinand

[pankaj_pandey2]

HI Rakesh,

Change the layout of asset depreciation area AO21. Make useful life filed as optional

Hope this would help you.

Regards

Pankaj P.

[Former Member]

Dear Pankaj,

IF I make useful life optional in the level of dep area, then I lose control of entering useful life for straight method depreciation. I tried to find useful life field in the level of asset class in screen layout but there wasn't any.

thanks,

[Former Member]

Hi,

According to me in your case as the Depreciation is on WDV basis the useful lfie is not of importance. But as being a mandatory field you should assign a figure like 999 years. But according to Indian Companies act 2013 changes, the depreciation should be calculated on the basis of useful life of asset.

Regards,

Malhar.