Depreciation plan of an asset assignment event
Introduction¶
It is possible to manage two different depreciation plans for every intercompany assignment event: one for the assigning entity and one for the acquiring entity. Every depreciation plan is saved by process with the relative event scenario.
Generation of the depreciation plan for the assigning entity¶
The depreciation plan is generated according to the following steps:
| Step | Action | Description |
|---|---|---|
| 1 | Cancels any pre-existing plans. | - |
| 2 | Generates pre-existing depreciation. | If the Depreciation fund amount (Credit) indicated on the assignment event is anything other than zero, it inserts a row with the following characteristics in the depreciation plan: - Date = last day of the month prior to the assignment event calculation start date. - Amount = value of the Depreciation fund amount (Credit) of the assignment event, with its sign changed. |
| 3 | Generates the depreciation plan until the ORIGINAL VALUE - PRE-EXISTING VALUE OF PROVISIONS has reached zero. | To do this, it determines the following values: - Total amount as the sum of the original amount and the depreciation fund amount - Frequency based on the value of the depreciation frequency. In particular: |
| 4 | Generates depreciation instalments. | To determine instalment (n), it calculates: - Cumulated percentage (n) = percentage * n - Cumulated instalment (n) = Original amount * Cumulated percentage (n)/100. If Cumulated instalment (n) > Total amount, then Cumulated instalment (n) = Total amount - Instalment (n) = Cumulated instalment (n) - Cumulated instalment (n-1) The generation of instalments ends when the cumulated value of the instalments generated reaches the total amount calculated previously. |
| 5 | Inserts closing row. | The row has the following characteristics: - date = month end (date (n-1) + frequency). Note: for the first row to be generated, the date (n - 1) is the month end prior to the calculation start date. - amount = amount of the previously calculated instalment (n) - origin = INPUT_WEB |
Example
- Calculation start date: 01/01/2005
- Depreciation fund amount: -2000 euros
- Instalment frequency: annual (1000 euros)
- Original amount of the asset: 5000 euros.
The following depreciation plan will be generated:
- +2000 at 31/12/2004, the pre-existing depreciation fund is allocated to the month end prior to the calculation start date.
- +1000 at 31/01/2005, first depreciation instalment
- +1000 at 31/01/2006
- +1000 at 31/01/2007
Generation of the depreciation plan for the acquiring entity¶
The depreciation plan is generated according to the following steps:
| Step | Action | Description |
|---|---|---|
| 1 | Cancels any existing depreciation plan | - |
| 2 | Generates the depreciation plan until the ASSIGNMENT VALUE has reached zero. | To do this, it determines the following values: - Total amount equal to the asset’s assignment price expressed in the acquiring entity’s currency - Frequency based on the value of the depreciation frequency. In particular: |
| 3 | Generates depreciation instalments. | To determine instalment (n), it calculates: - Cumulated percentage (n) = percentage * n - Cumulated instalment (n) = Assignment price expressed in the acquiring entity’s currency * Cumulated percentage (n)/100. If Cumulated instalment (n) > Total amount, then Cumulated instalment (n) = Total amount - Instalment (n) = Cumulated instalment (n) - Cumulated instalment (n-1) The generation of instalments ends when the cumulated value of the instalments generated reaches the total amount calculated previously. |
| 4 | Inserts closing row. | The row has the following characteristics: - date = month end (date (n-1) + frequency). Note: for the first row to be generated, the date (n - 1) is the month end prior to the calculation start date. - amount = amount of the previously calculated instalment (n) - origin = INPUT_WEB |
Example
- Calculation start date: 22/09/2009
- Assignment price: 5000 euros
- Instalment frequency: annual
- Depreciation percentage: 25%
The following depreciation plan will be generated:
- +1250 at 31/08/2010, first depreciation instalment
- +1250 at 31/08/2011
- +1250 at 31/08/2012
- +1250 at 31/08/2013