Depreciation Calculation

[former_member565124]

Hello Experts,

I am aware that depreciation calculation of assets depends on the depreciation key configuration in AFAMA(base method, declining method, multilevel ,etc) but i would like to understand how SAP calculates the dep value per period based on the methods defined per dep key. In program RATRACE0, i can see the values that made up the dep amount. How does the percentage rate gets calculated? How is dep period derived (what does 2/12 means)?

Are there any FM's that i can debug to determine how SAP calculates the depreciation amount?

Would appreciate if someone could enlighten me with this.

Thank you!

Jack

[ajaycwa1981 · Accepted solution]

Hi Jack

If your dep key is based on explicit % then that becomes your rate of depreciation

if your dep key is based on total useful life, then the % is derived from total useful life. Eg- if TUL is 10 years, rate of depreciation  is 10%

if your key is based on Rem. Useful life, then Sap calculates the rate of depreciation at every period end based on RUL. ,    

In Aw01n you can click on one of the icons and it shows you a detailed explanation of how the depreciation was calculated

Ajay M

[former_member565124 · Accepted solution]

Thanks Ajay!

I've checked the base method of the dep key and it uses percentage from the useful life as dep. method. The total useful life of asset is 23yrs but the percentage rate is 25.5319148936. Appreciate if you can share how this percentage rate gets calculated.

Below are the values that made up the depreciation amount.

Base Value: 26,359.31

Percentage Rate: 25.5319148936

Dep. periods: 2/12

Dep amount: 1,121.67 w/c was split in 3 periods.

Period 1: 0.31

Period 2: 561.00

Period 3: 560.00

Kindly share your thoughts why it was split this way.

Thank you very much!

Jack

[ajaycwa1981 · Accepted solution]

Hi Jack

1)  With a dep amount of 561, based on 26539, it seems you have 47 months (approx.) life leftover in the asset.. The depreciation rate is calculated based on that.

a. 47/12 = 3.91666 years

b. 100/3.91666 = 25.53%

2. If that does not help you, please provide Dep Start Date, Total Useful Life, Expired useful life and if you change the Useful life in between.

3. Also let me know if your dep key is based on Total useful life or expired useful life.?

Regards

Ajay M

[former_member565124 · Accepted solution]

Hi Ajay,

1. The remaining life is 5 yrs. = 60 months.

2. Dep start date = 01/01/1997, total useful life = 23yrs and 3months, expired useful life = 18 yrs and  3months. Added 5 yrs from 18yrs and 3 months.

3. Can you pls share how to check if dep key is based on total useful life or expired useful life?

Thank you very much!

Jack

[ajaycwa1981 · Accepted solution]

Hi Jack

check the multi level method if the tick on "rem useful life" is ON

[former_member565124 · Accepted solution]

Hi Ajay,

Remaining useful life is ticked for multilevel method.

Regards.

Jack

[former_member565124 · Accepted solution]

Hi Ajay,

I've checked the parameters used in calculating depreciation and the remaining useful life is 50 months. It make sense that the percentage rate is 24% (50/12 = 4.166, 100/ 4.166). However, the remaining useful life reflected in asset explorer is 5 yrs = 60 months.

Useful life = 23yrs and 3 months

Expired Useful Life = 18yrs and 3 months

Remaining Useful Life = 5 yrs

Hope you can advise why 50months is used as remaining period.

Thanks

[ajaycwa1981 · Accepted solution]

Hi Jack

With Dep Start date = 01/01/97, it is 19 years of Useful Life which has expired upto 01/01/2016

So, left over is 4 Yrs and 3 Months (51 months basically) at the start of Jan 2016.. At the end of Jan, it will be 50 months.

Regards

Ajay M

[bose_gourav · Accepted solution]

Hi Ajay,

I have a question how SAP is calculating the depreciation rate is it based on base method or ordinary depreciation classification or multi-level method (base value)?

Secondly, generally there are 4 types of depreciation methods being used across all the clients i.e. Straight-line, Declining balance, double declining, Sum-of-the-years' digits, and Units of production. My question here is which SAP standard base method we use for SLM and Declining balance method for depreciation computation?

And also how these base method variants i.e. "0007- percentage from life V$ 0011- percentage from useful life" are different among themselves? As when we post an acquisition value to the Asset with same value and useful life with two different dep. key one using 0007 and other 0011 as a base method followed by same multi-level method base value (01-Acq Values) system is showing the same annual depreciation computation value. In which scenario or case we choose one over the other.