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Depreciation key configuration- Degressif depreciation(France) example

Hi All,

It’s always been one of my dream to have my own blog to share my learning but never dared as few thoughts stopped me taking the STEP. But today i have decided to write and here I am writing my first blog post.

In this very first post, i am sharing depreciation key configuration for degressive depreciation with an example below.

 

 

About Degressif depreciation:

1. Degressif depreciation is used to calculate French tax depreciation.

1.Depreciation should be calculated on the residual value and at a specific depreciation rate(1.25 in example).

2.  When the dégressif depreciation becomes less than (St.line) , then following months depreciation should retain the (St.line) amount. (retained amount: 391.93 in example).

 

To achieve this requirement, a depreciation key needs to be created as explained in steps below:

1.Base Method: This method used to calculate the depreciation .Generally base methods supplied by SAP are enough to meet any requirement.

use existing Base method 0007(phase1) and 0005(phase2) for the above scenario.

 

2. Declining-Balance Method: Now as there is certain rate to be applied on depreciation calculated from the above method. We need to maintain that %age  in this method

 

 

3. Multilevel method: If you observe, degressif depreciation is calculated  by  (NBV/total useful life) every time and (St.line) by the(( NBV of degressif depreciation) / remaining life).

This setting is made in Multi level method. We create two multilevel methods to get deprecation for both the methods.

MLM for Degressif depn(phase1)

MLM for (St.line) depn (phase2)

Base value

Note: Rem.life indicator is set as (St.line) column depreciation is calculated by NBV of degressif depreciation//rem.life .

Now we are ready to create the depreciation key using above methods.

Depreciation key tcode – AFAMA

Our depreciation key is going to have two phases as changeover is required in year 2021 because actual degrissf dep ((2743.49/10)*1.25= 342.93)  is <  st.line depn (2743.49/7 = 391.93).

PHASE1- Declining based depreciation

PHASE2- ( St.line) depreciation

Now let’s create asset and assign dep key and see how the values are calculated in SAP.

 

 

Hope you find this useful. Your feedback and suggestions are highly appreciated.

Quote: “The First step is you have to say that you can”

Thank You,

Nikhila

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