Hello community,
I am trying to calculate depreciation for Japan. There is a specific requirement when declining balance method is used for depreciation.
If depreciation cost for calculated year is less than minimum depreciation amount then depreciation method type switches to net book value multiplied by minimum depreciation rate. Net book value after switch is depreciated in remaining calendar years.
According to above table, here is my fixed asset that i want to calculate.
| Acquisition value | 239.590 | |
| Salvage Value | 1 | |
| Service date | April 1st, 2022 | |
| 1st Year service month | 9 months | |
| Useful Life | 8 years | |
| Depreciation Rate | 0,25 | rate for 8 years from table above |
| Minimum Dep.amount | 18.949 | Acquisition value x Rate to Determine min. depr. Amount |
| Depreciation Rate after minimum amount | 0,334 | New rate per year if acc. Depreciation from declining balance is lower than Minimum Depr. Amount |
Based on the information above, my depreciation for each year should look like this
| Year | Depr. Year | Depreciation | Net Book Value | |
|---|---|---|---|---|
| 2022 | 1st Year | 44.923 | 194.667 | Declining Balance 9 month depreciation |
| 2023 | 2nd Year | 48.666 | 146.001 | Declining Balance |
| 2024 | 3rd Year | 36.500 | 109.501 | Declining Balance |
| 2025 | 4th Year | 27.375 | 82.126 | Declining Balance |
| 2026 | 5th Year | 20.531 | 61.595 | Declining Balance |
| After this point declining balance depreciation amount is lower than minimum depreciation amount in the table, depreciation type switches to static rate for remaining calendar years. | ||||
| 2027 | 6th Year | 20.572 | 41.023 | Net book value from 2026 multiplied by 0,334 |
| 2028 | 7th Year | 20.572 | 20.451 | Net book value from 2026 multiplied by 0,334 |
| 2029 | 8th Year | 20.450 | 1 | Remaining net book value - Salvage value |
Anyone has idea how to get this result in IFS standard v. 10 update 14.
Thank you very much