How system is calculating Depreciation ?

[shreekumar]

Hello everyone I want to know something about depreciation calculation on fixed asset.

As we know the the calculation for Straight line method is :- Total value of asset / Useful life = Depreciation value

But here in sap we uploaded some legacy asset data which Acquisition date -  20.12.2001

Take over date in SAP :- 01.04.2014

Total life of the asset is - 25 years

Life expired - 12.1 years

Total value of the asset- 39655119.11

Accum. Depr. of that asset- 34426880.92

Net block is - 5228238.19

System is calculation depreciation as per Straight line method.

So if we'll calculate depreciation for remaining 12.9 years then the depreciation value per year-

5228238.19 / 12.9 = 405289.78

But here in SAP the system is showing different value for depreciation .

So can you please let me know that how system is calculating depreciation in SAP??

Here I have given some screenshot for your better understand.

[shreekumar · Accepted solution]

Hello Sir as per your  requirement here I've given the screenshot of Depreciation key and the methods assigned to it.

[former_member198650 · Accepted solution]

Hi Shree,

Can you share complete screen shot of dep.area for the asset. Here the period is displaying partially.

Regards,

Mukthar

[shreekumar · Accepted solution]

Hello Sir here I have given another screenshot for depreciation areas of the Assets.

[former_member198650 · Accepted solution]

Hi Shree,

Here system calculating correctly. The calculation is:

NBV = 5228238.19

Total useful life in days = 365*25 = 9125

Expired useful life in days = 12 years 117 days = 12*365+117= 4497

Remaining useful life in days = 9125-4497=  4628

So depreciation for each year will be = 5228238.19/4628 *365 = 412339.40

I hope you are clear now.

Regards,

Mukthar

Note: If your issue is resolved, please close it by marking correct or helpful answer.

[shreekumar · Accepted solution]

Thanks Sir, now I got to know that how system is calculating depreciation. Our client gave us wrong calculation on depreciation that's why I was in confuse.

Thanks Again

[shreekumar · Accepted solution]

Hello Sir, I have one doubt that in period column it is showing a period of 117.

But I want to know that how system is calculating 117 days.

Because the acquisition date is :- 20.12.2001

If we'll calculate up to 01.04.2002- Then it is 102 days

But system is showing a period of 117 days.

From where system is getting 15 days extra ??

Please clarify this..

[former_member183294 · Accepted solution]

Shreekumar Sethi

If you required changes Asset Master of expired period - change through AS02

Remaining life = Useful life - Expired life

Then after run AFAR.

Planned value calculate revised remaining life of Asset

With regards,

Ganesh      

[former_member198650 · Accepted solution]

Hi Shree,

Check changes has been done for the dep.start date for the asset. Earlier the dep.start date would be 05.12.2001. Later it was changed to 20.12.2001.

Regards,

Mukthar

[shreekumar · Accepted solution]

Hello Sir, still I have some doubts on depreciation calculation. As per the above screenshot I understood how system is calculating depreciation but now I am facing another type of situation like first year system is calculating depreciation as per your calculation method but from the next year system is calculating depreciation in another way. Here I uploaded a screenshot where there is some differences in first year depreciation from another years depreciation . Also I've highlighted it for your better understand.

So Can you please let me understand how system is calculating depreciation after first year and why there is some differences in every year's depreciation as we are using Straight line method. So the depreciation should come each and every year.

Please clarify this. Thanks in advance

[former_member198650 · Accepted solution]

Hi Shree,

Run AFAR or recalculate values from the edit menu of AS02 and check the impact.

Regards,
Mukthar

[shreekumar · Accepted solution]

Hello Sir as per your said I ran AFAR and recalculate depreciation and check the differences . Here system changed the expired period from 33 to 42 after recalculate depreciation . So I couldn't understand why system is calculating the depreciation like before. Always depreciation for first year (2015) is calculating perfectly but after that system is calculating depreciation differently.

So, here I am giving the screenshot . Please check this .

[former_member198650 · Accepted solution]

Hi Shree,

First check the changes done in the asset master. Then after share screen of depreciation period values for the year 2015.

Regards,

Mukthar

[shreekumar · Accepted solution]

Hello Sir nothing I've changed in asset master . Only I ran AFAR recalculate depreciation and then I checked and took the screenshot.

[former_member198650 · Accepted solution]

Hi,

Share screen shot of posted values tab of the asset for the year 2015.

Regards,

Mukthar

[shreekumar · Accepted solution]

Hello Sir, As per your requirement here I have given the screenshots  below. Please have a look.

Regards,

Shreekumar

[Former Member]

Hi,

Can you show the multilevel method that is assigned to the depreciation key in the asset. Have you ticked the Remaining life box in the Multilevel method. Because the depreciation will be on remaining useful life only if the box is ticked.

Regards,

Malhar.

[former_member183294]

Hi,

can you refer below link -

Dep Cal

=  NBV-Scrap/ Remaining life of asset

As per scenario of Asset

Useful is 25 year

Expire life - 12 year 102 (not displayed Expiry Periods) calculated

Remaining - 12 years 263 Days

Dep cal  = 12* 365 = 4380 + 263 = 4643

NBV= 5228238.19/4643 = 1126.05 per day

2014 = 1126.05*365 days = 411007.31

If dep calculating Incorrect value , kindly share dep key confg

I hope you this will you for depreciation calculation

With regards,

Ganesh

[former_member198650]

Hi,

Can you please share screen shot of dep.methods maintained for the dep.key?

Regards,

Mukthar