Question

Declining balance depreciation Fixed Asset

  • 27 October 2023
  • 0 replies
  • 31 views

Userlevel 1
Badge +5
  • Do Gooder (Customer)
  • 6 replies

Hello Community,

 

for our tax book we need to deprecitat Fixed Asset object based on Declining depreciatin Method.

 

Depreciation amount = depreciation rate x book value of the previous year.

The depreciation rate is the same every year, for example 20 percent. The book value, on the other hand, is different every year and corresponds to the net book value at the beginning of the year.

 

That is the rule:

  • declining mehthod can be 2,5 times higer than linear method
  • but maximal 25% of acquistion amount respect net value

So we calculate, 100 / Lifetime * 2,5 result maximum 25%

Example: 10 years depreciation, 100/10 = 10% *2,5 = 25% 

Example: 8 years deprecation, 100/8 = 12,5% *2,5 = 31,25% - Maximum 25%

Example 15 years depreceation, 100/12 = 8,33*2,5 = 20,83%

 

Actually we need to calculate in advance and select the method with the respctive factor. Is there a possibility to set up one depreciation mehtod that calcualtes that factor for us?

 

regards

 

Sebastian

 


0 replies

Be the first to reply!

Reply