Hierarchy
⤷ 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 |