SAP ABAP Data Element UC_DEPMETH (Amortization Method)
Hierarchy
SEM-BW (Software Component) SEM-BW: Strategic Enterprise Management
   FIN-SEM-BCS (Application Component) Business Consolidation
     UCF6 (Package) SEM-BCS: Consolidation of Investments
Basic Data
Data Element UC_DEPMETH
Short Description Amortization Method  
Data Type
Category of Dictionary Type D   Domain
Type of Object Referenced     No Information
Domain / Name of Reference Type UC_DEPMETH    
Data Type NUMC   Character string with only digits 
Length 1    
Decimal Places 0    
Output Length 1    
Value Table      
Further Characteristics
Search Help: Name    
Search Help: Parameters    
Parameter ID   
Default Component name    
Change document    
No Input History    
Basic direction is set to LTR    
No BIDI Filtering    
Field Label
  Length  Field Label  
Short 10 Amo.Method 
Medium 20 Amortization Method 
Long 40 Amortization Method 
Heading 10 Amo.Method 
Documentation

Definition

The valuation allowance method determines if and how an asset (such as a noncurrent asset or goodwill) is depreciated or amortized.

Two procedures are available for the straight-line method:

  • Depreciation over the total useful life
    The amount of depreciation equals the quotient from dividing the original cost by the total useful life. Subsequent acquisitions extend the life of depreciation, whereas subsequent retirements reduce the life of depreciation.
  • Depreciation over the remaining useful life
    The amount of depreciation equals the quotient from dividing the net book value by the remaining useful life. Subsequent acquisitions or retirements do NOT change the life of depreciation.

Two procedures are available for the declining-balance method (see also the example further below):

  • Depreciation with midyear reference value
    The amount of depreciation equals the beginning book value of the current closing period multiplied by the percentage rate.
  • Depreciation with reference value at beginning of year
    The amount of depreciation equals the beginning book value of the current fiscal year multiplied by the percentage rate.

The declining-balance method switches over to the straight-line method for the remaining life of the asset as soon as the straight-line amount of depreciation exceeds the declining-balance amount (in terms of percent).

Use

Dependencies

Example

The following example illustrates the difference between the two procedures for the declining-balance method:

Asset ABC is depreciated using the declining-balance method. The precentage rate of depreciation is 10%.

Reference value at midyear:

Year    Quarter    Starting BV    Depreciation    Ending BV

1    1    1000,00    25,00    975,00

1    2    975,00    24,38    950,63

1    3    950,63    23,77    926,86

1    4    926,86    23,17    903,69

2    1    903,69    22,59    881,10

Reference value at beginning of year:

Year    Quarter    Starting BV    Depreciation    Ending BV

1    1    1000,00    25,00    975,00

1    2    975,00    25,00    950,00

1    3    950,00    25,00    925,00

1    4    925,00    25,00    900,00

2    1    900,00    23,13    876,88

History
Last changed by/on SAP  20050219 
SAP Release Created in 3.1B