Standard depreciation method description > Attached document: Italian standard depreciation method description
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Italian legislation depreciation method description
This document is an appendix to the documentation on the setup of Depreciation methods.
In standard, Sage X3 comes with a number of depreciation methods.
Some are associated with a given legislation, while others are common to all legislations.
This document describes the calculation principles of the depreciation methods associated with the Italian legislation.
The other methods are described in appendix documentations, which can be accessed from the documentation on the depreciation methods common to all legislations.
IT - Ordinario / Anticipato
This is a depreciation method used in Italy.
"Ordinario" is a straight-line depreciation method that can be accelerated by the "anticipato".
Depreciation origin
It is dependent on the Fixed asset type and on the presence or absence of option Investment fiscal year prorata at IT method definition level:
- If option Investment fiscal year prorata is not specified:
- for tangible fixed assets, as for intangible fixed assets, a complete annuity will be taken for the first depreciation fiscal year, whatever the depreciation start date.
- If option Investment fiscal year prorata is specified:
· for tangible fixed assets, as for intangible fixed assets, the depreciation origin is the day entered in the depreciation start date.
Duration
The depreciation duration is not specified for this depreciation method.
Rate
1 or 2 rates are indicated with a 4-decimal accuracy (for example: 33.3333 %):
- The 1st rate is used to determine the "Ordinario" depreciation.
- The 2nd rate is used to determine the "Anticipato" depreciation.
This rate:
- must be ≤ the first rate,
- can be specified and taken into account only for the first three years, for assets that are "New" when bought
- can be specified and taken into account only for the first year, for assets that are "Second-hand" when bought
An "anticipato" can be applied freely: for instance, for a "New" asset, the company can choose not to apply any anticipato or to use it for 1 year among the 3 potential ones, or for 2 years, or the 3 of them.It is also possible to apply different rates to these different years.
Depreciation end date
For this method, the depreciation end date cannot be determined, it remains unentered.
Prorata temporis
The (default) general rules are the following:
- For the investment fiscal year, irrespective of the depreciation start date:
- For a tangible asset, a half annuity is calculated
- For an intangible asset, a full annuity is calculated - For the disinvestment fiscal year, irrespective of the disposal date:
- No charge is calculated.
These general rules can be questioned by 2 options specified at depreciation method definition level:
- Investment fiscal year prorata
- Disinvestment fiscal year prorata
- If the 1st option is specified, a prorata in days is applied to the 1st fiscal year, if the asset is not held for a complete year.
- if the 2nd option is specified, a prorata in days is applied to the asset disposal fiscal year: the charge will be calculated until the disposal date.
Depreciation charges
The depreciation charge calculation is carried out as follows:
Ordinario depreciation charge
- For the 1st fiscal year:
- For a tangible fixed asset:
Depreciation value * Ordinario rate * prorata temporis 1 (1)
- For an intangible fixed asset:
Depreciation value * Ordinario rate * prorata temporis 2 (2)
- - From the 2nd fiscal year onward:
Depreciation value * Ordinario rate * prorata temporis 3 (3)
(in the limit of the Net depreciation value)
Anticipato depreciation charge:
- For the 1st fiscal year:
- For a tangible fixed asset:
Depreciation value * Anticipato rate * prorata temporis 1 (1)
- For an intangible fixed asset:
Depreciation value * Anticipato rate * prorata temporis 2 (2)
- - From the 2nd fiscal year onward:
Depreciation value * Anticipato rate * prorata temporis 3 (3)
(1) Prorata temporis 1:
- Either ½ if option Investment fiscal year prorata is not specified at depreciation method definition level.
- Or Number of days [Depreciation start date – min (Fiscal year end date, Disposal date)] / 365 or 366 days, if option Investment fiscal year prorata is specified.
(2) Prorata temporis 2:
- Either 1 if option Investment fiscal year prorata is not specified at depreciation method definition level.
- Or Number of days [Depreciation start date – min (Fiscal year end date, Disposal date)] / 365 or 366 days, if option Investment fiscal year prorata is specified.
(3) Prorata temporis 3:
- Either 0 if option Disinvestment fiscal year prorata is not specified at depreciation method definition level and if the Disposal date Î [Fiscal year start date – Fiscal year end date]
- Or Number of days [max (Fiscal year start date, Depreciation start date) – Disposal date] /365 or 366 days, if option Investment fiscal year prorata is specified and if the Disposal date Î [Fiscal year start date – Fiscal year end date].
- Depreciable value = Gross value – Residual value
- Gross value = Depreciation basis
- The Ordinario charge is stored in the Charge section.
- The Anticipato charge is stored in the Exceptional charge section.
- If the Investment fiscal year prorata and Disinvestment fiscal year prorata options are not specified, the Ordinario rate and the possible Anticipato rate are applied irrrespective of the fiscal year duration: it is considered that the fiscal year corresponds to one year.
- The disposal reason Rejection with exceptional depreciation has no effect for a schedule depreciated based on this depreciation method, it will be automatically processed in the same way as the disposal reason Rejection.
The depreciation charge is calculated when the asset is acquired and issued during the same fiscal year:
Option | Option | Charge |
No | No | 0.00 |
No | Yes | ½ annuity * holding prorata or (1) 1 annuity * holding prorata |
Yes | No | 0.00 |
Yes | Yes | Annuity * holding prorata |
(1) ½ annuity if the Fixed asset type = Tangible and 1 annuity if the Fixed asset type = Intangible.
Distribution of the fiscal year charge on the periods
If the fiscal year is divided into several periods, the fiscal year charge is distributed over these periods as follows:
Period Charge pc =
Fiscal year charge
*
*( Σ p1 to pc ( (Period weight / Period number of days) * Number of holding days in the period )
/
( Σ p1 to pf ( (Period weight / Period number of days) * Number of holding days in the period )
-
Depreciation total of previous periods
p1 to pc = from the 1st holding period in the fiscal year to the current period included (1)
p1 to pf = from the 1st holding period in the fiscal year to the last holding period in the fiscal year (2)
(1) Unless the asset is issued in the fiscal year before this current period or if it is completely depreciated in the fiscal year before this current period. The period retained is thus the minimum period among the 3 following ones:
- period of depreciation end if the Depreciation end date belongs to the interval [period start – period end]
- disposal period if the Disposal date belongs to the interval [period start – period end]
- current period
(2) If option Investment fiscal year prorata is not specified at method definition level, the 1st fiscal year charge will either be a complete annuity (intangible fixed asset), or a ½ annuity (tangible fixed asset). This fiscal year charge must be distributed on the different periods of the fiscal year as if the asset had been acquired on the first day of the fiscal year: the 1st holding period in the fiscal year is thus the 1st period of the fiscal year.
Each depreciation charge, the Ordinario and the Anticipato depreciation charges must be distributed over periods based on the same distribution rules.
Example 1:
Current period = [01/01/2005 - 03/31/2005]
Purchase date: 1/1/2005
Value: €1000
Depreciation rate: 20%
Fiscal year charge: 1000 * 20% * 50% = €100
Quarter 1 depreciation charge: (01/01/2005 - 03/31/2005] = 100 * 3/12 = 25
Quarter 2 depreciation charge: (4/1/2005 - 6/30/2005] = 100 * 3/12 = 25
Quarter 3 depreciation charge: (7/1/2005 - 9/30/2005] = 100 * 3/12 = 25
Quarter 4 depreciation charge: (10/1/2005 - 12/31/2005] = 100 * 3/12 = 25
Example 2:
Current period = [01/01/2005 - 03/31/2005]
Purchase date: 3/23/2005
Value: €1000
Depreciation rate: 20%
Fiscal year charge: 1000 * 20% * 50% = €100
Quarter 1 depreciation charge: (01/01/2005 - 03/31/2005] = 100 * 3/12 = 25
Quarter 2 depreciation charge: (4/1/2005 - 6/30/2005] = 100 * 3/12 = 25
Quarter 3 depreciation charge: (7/1/2005 - 9/30/2005] = 100 * 3/12 = 25
Quarter 4 depreciation charge: (10/1/2005 - 12/31/2005] = 100 * 3/12 = 25
Example 3:
Current period = [4/1/2005 - 6/30/2005]
Purchase date: 3/23/2005
Value: €1000
Depreciation rate: 20%
Fiscal year charge: 1000 * 20% * 50% = €100
Quarter 1 depreciation charge: [01/01/2005 - 03/31/2005] = 0 since the asset has been recorded after the closing of this 1st quarter
Quarter 2 depreciation charge: (4/1/2005 - 6/30/2005] = 100 * 6/12 = 50 ... including 25 to catch up with the 1st quarter
Quarter 3 depreciation charge: (7/1/2005 - 9/30/2005] = 100 * 3/12 = 25
Quarter 4 depreciation charge: (10/1/2005 - 12/31/2005] = 100 * 3/12 = 25
Examples
1st example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 11/5/2005
- Ordinario rate: 20%
- Fixed asset type: Tangible
- Purchase status: New
Fiscal year | Net value | Ordinario depreciation charge | Fiscal year total |
1/1/2005 – 12/31/2005 | 10,000.00 | (1) 1,000.00 | 1,000.00 |
1/1/2006 – 12/31/2006 | 9,000.00 | 2,000.00 | 3,000.00 |
1/1/2007 – 12/31/2007 | 7,000.00 | 2,000.00 | 5,000.00 |
1/1/2008 – 12/31/2008 | 5,000.00 | 2,000.00 | 7,000.00 |
1/1/2009 – 12/31/2009 | 3,000.00 | 2,000.00 | 9,000.00 |
1/1/2010 – 12/31/2010 | 1,000.00 | (2) 1,000.00 | 10,000.00 |
(1) 10 000,00 * 20% * 1/2 since in the absence of option Investment fiscal year prorata, a ½ annuity is applied, for a Tangible asset.
(2) 1 000,00 since the depreciation charge is restricted to the Net depreciation value.
2nd example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 11/5/2005
- Ordinario rate: 25%
- Fixed asset type: Intangible
- Purchase status: New
Fiscal year | Net value | Ordinario depreciation charge | Fiscal year total |
1/1/2005 – 12/31/2005 | 10,000.00 | (1) 2,500.00 | 2,500.00 |
1/1/2006 – 12/31/2006 | 7,500.00 | (2) 2,500.00 | 5,000.00 |
1/1/2007 – 12/31/2007 | 5,000.00 | 2,500.00 | 7,500.00 |
1/1/2008 – 12/31/2008 | 2,500.00 | 2,500.00 | 10,000.00 |
(1) 10 000,00 * 25% * 1 since in the absence of option Investment fiscal year prorata, a complete annuity is applied, for an Intangible asset.
3rd example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 4/3/2005
- Ordinario rate: 20%
- Fixed asset type: Tangible
- Purchase status: New
- Option at the IT method level: Investment fiscal year prorata
Fiscal year | Net value | Ordinario depreciation charge | Fiscal year total |
1/1/2005 – 12/31/2005 | 10,000.00 | (1) 1,495.89 | 1,495.89 |
1/1/2006 – 12/31/2006 | 8,504.11 | 2,000.00 | 3,495.89 |
1/1/2007 – 12/31/2007 | 6,504.11 | 2,000.00 | 5,495.89 |
1/1/2008 – 12/31/2008 | 4,504.11 | 2,000.00 | 7,495.89 |
1/1/2009 – 12/31/2009 | 2,504.11 | 2,000.00 | 9,495.89 |
1/1/2010 – 12/31/2010 | 504.11 | 504.11 | 10,000.00 |
(1) 10,000.00 * 20% * 273/365 since the presence of the Investment fiscal year prorata option causes the application of a prorata in days: the asset has been held 273 days of the 365 days of the year.
4th example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 11/5/2005
- Ordinario rate: 25%
- Fixed asset type: Intangible
- Purchase status: New
- Option at the IT method level: Investment fiscal year prorata
Fiscal year | Net value | Ordinario depreciation charge | Fiscal year total |
1/1/2005 – 12/31/2005 | 10,000.00 | (1) 390.41 | 390.41 |
1/2/2006 – 12/31/2006 | 9,609.59 | 2,500.00 | 2,890.41 |
1/1/2007 – 12/31/2007 | 7,109.59 | 2,500.00 | 5,390.41 |
1/1/2008 – 12/31/2008 | 4,609.59 | 2,500.00 | 7,890.41 |
1/1/2009 – 12/31/2009 | 2,109.59 | 2,109.59 | 10,000.00 |
(1) 10,000.00 * 25% * 57/365 since the presence of the Investment fiscal year prorata option causes the application of a prorata in days: the asset has been held 57 days of the 365 days of the year.
5th example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 11/5/2005
- Ordinario rate: 20%
- Anticipato rate: 10 % on each of the first 3 years
- Fixed asset type: Tangible
- Purchase status: New
- Option at the IT method level: Investment fiscal year prorata
Fiscal year | Net value | Ordinario depreciation charge Anticipato depreciation charge | Fiscal year total |
1/1/2005 – 12/31/2005 | 10,000.00 | (1) 312.33 156.16 | 468.49 |
1/2/2006 – 12/31/2006 | 9,531.51 | 2,000.00 1,000.00 | 3,468.49 |
1/1/2007 – 12/31/2007 | 6,531.51 | 2,000.00 1,000.00 | 6,468.49 |
1/1/2008 – 12/31/2008 | 3,531.51 | 2,000.00 0.00 | 8,468.49 |
1/1/2009 – 12/31/2009 | 1,531.51 | (2) 1,531.51 0.00 | 10,000.00 |
(1) (10,000.00 * 20% * 57/365) and (10,000.00 * 10% * 57/365) since the presence of the Investment fiscal year prorata option causes the application of a prorata in days: the asset has been held 57 days of the 365 days of the year.
(2) 1,531.51 since the depreciation charge is restricted to the Net depreciation value.
6th example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 11/5/2005
- Ordinario rate: 20%
- Anticipato rate: 10 % for the investment fiscal year
- Fixed asset type: Tangible
- Purchase status: Second hand
- Option at the IT method level: Investment fiscal year prorata
Fiscal year | Net value | Ordinario depreciation charge Anticipato depreciation charge | Fiscal year total |
1/1/2005 – 12/31/2005 | 10,000.00 | (1) 312.33 156.16 | 468.49 |
1/1/2006 – 12/31/2006 | 9,531.51 | 2,000.00 | 2,468.49 |
1/1/2007 – 12/31/2007 | 7,531.51 | 2,000.00 | 4,468.49 |
1/1/2008 – 12/31/2008 | 5,531.51 | 2,000.00 | 6,468.49 |
1/1/2009 – 12/31/2009 | 3,531.51 | 2,000.00 | 8,468.49 |
1/1/2010 – 12/31/2010 | 1,531.51 | (2) 1,531.51 | 10,000.00 |
(1) (10,000.00 * 20% * 57/365) and (10 000 * 10% * 57/365) since the presence of the Investment fiscal year prorata option causes the application of a prorata in days: the asset has been held 57 days of the 365 days of the year.
(2) 1,531.51 since the depreciation charge is restricted to the Net depreciation value.
7th example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 11/5/2005
- Ordinario rate: 20%
- Anticipato rate: 10 % for the investment fiscal year
- Fixed asset type: Tangible
- Purchase status: Second hand
Fiscal year | Net value | Ordinario depreciation charge Anticipato depreciation charge | Fiscal year total |
1/1/2005 – 12/31/2005 | 10,000.00 | (1) 1,000.00 500.00 | 1,500.00 |
1/2/2006 – 12/31/2006 | 8,500.00 | 2,000.00 | 3,500.00 |
1/1/2007 – 12/31/2007 | 6,500.00 | 2,000.00 | 5,500.00 |
1/1/2008 – 12/31/2008 | 4,500.00 | 2,000.00 | 7,500.00 |
1/1/2009 – 12/31/2009 | 2,500.00 | 2,000.00 | 9,500.00 |
1/1/2010 – 12/31/2010 | 500.00 | (2) 500.00 | 10,000.00 |
(1) (10 000,00 * 20% * 1/2) and (10 000,00 * 10% * 1/2) since in the absence of option Investment fiscal year prorata, a ½ annuity is applied, for a Tangible asset.
(2) 500.00 since the depreciation charge is restricted to the Net depreciation value.
8th example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 11/5/2005
- Ordinario rate: 20%
- Anticipato rate: 10 % for the investment fiscal year and 0,00 % for both others
- Fixed asset type: Tangible
- Purchase status: New
Fiscal year | Net value | Ordinario depreciation charge Anticipato depreciation charge | Fiscal year total |
1/1/2005 – 12/31/2005 | 10,000.00 | (1) 1,000.00 500.00 | 1,500.00 |
1/1/2006 – 12/31/2006 | 8,500.00 | 2,000.00 | 3,500.00 |
1/1/2007 – 12/31/2007 | 6,500.00 | 2,000.00 | 5,500.00 |
1/1/2008 – 12/31/2008 | 4,500.00 | 2,000.00 | 7,500.00 |
1/1/2009 – 12/31/2009 | 2,500.00 | 2,000.00 | 9,500.00 |
1/1/2010 – 12/31/2010 | 500.00 | (2) 500.00 | 10,000.00 |
(1) (10 000,00 * 20% * 1/2) and (10 000,00 * 10% * 1/2) since in the absence of option Investment fiscal year prorata, a ½ annuity is applied, for a Tangible asset.
(2) 500.00 since the depreciation charge is restricted to the Net depreciation value.
9th example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 3/1/2006
- Ordinario rate: 25%
- Anticipato rate: 20 % for each of the first 3 fiscal years
- Fixed asset type: Tangible
- Purchase status: New
Fiscal year | Net value | Ordinario depreciation charge Anticipato depreciation charge | Fiscal year total |
1/1/2006 – 12/31/2006 | 10,000.00 | (1) 1,250.00 1,000.00 | 2,250.00 |
1/1/2007 – 12/31/2007 | 7,750.00 | 2,500.00 2,000.00 | 6,750.00 |
1/1/2008 – 12/31/2008 | 3,250.00 | 2,500.00 (2) 750.00 | 10,000.00 |
(1) (10 000,00 * 25% * 1/2) and (10 000,00 * 20% * 1/2) since in the absence of option Investment fiscal year prorata,
a ½ annuity is applied, for a Tangible asset.
(2) Restricted to the Net depreciation value after carrying out the 2 500,00 of Ordinario depreciation charges.
Distribution of the fiscal year 2006 depreciation charge, based on the period weight:
Period | Number of days / Weight | Number of holding days | Ordinario depreciation charge Anticipato depreciation charge |
1/1/2006 – 3/31/2006 | 90 / 90 | 90 | (3) 308.22 246.58 |
4/1/2006 – 6/30/2006 | 91 / 91 | 91 | (4) 311.64 249.31 |
7/1/2006 – 9/30/2006 | 92 / 92 | 92 | (5) 315.07 252.06 |
10/1/2006 – 12/31/2006 | 92 / 92 | 92 | (6) 315.07 252.05 |
Fiscal year 2006 total | 1,250.00 1,000.00 | ||
(3) 1,250.00 * (90 / 90 * 90) / [ (90 / 90 * 90) + (91 / 91 * 91) + (92 / 92 * 92) + (92 / 92 * 92) ] = 308.22
(4) 1,250.00 * [ (90 / 90 * 90) + (91 / 91 * 91) ]
/ [ (90 / 90 * 90) + (91 / 91 * 91) + (92 / 92 * 92) + (92 / 92 * 92) ] = 619.86 – 308.22 = 311.64
(5) 1,250.00 * [ (90 / 90 * 90) + (91 / 91 * 91) + (92 / 92 * 92) ]
/ [ (90 / 90 * 90) + (91 / 91 * 91) + (92 / 92 * 92) + (92 / 92 * 92) ] = 934.93 – 619.86 = 315.07
(6) 1,250.00 * [ (90 / 90 * 90) + (91 / 91 * 91) + (92 / 92 * 92) + (92 / 92 * 92) ]
/ [ (90 / 90 * 90) + (91 / 91 * 91) + (92 / 92 * 92) + (92 / 92 * 92) ] = 1,250.00 – 934.93 = 315.07
The Anticipato depreciation charge of 1 000,00 is distributed over the various periods based on the same distribution.
10th example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 3/1/2006
- Ordinario rate: 25%
- Anticipato rate: 20 % for each of the first 3 fiscal years
- Fixed asset type: Tangible
- Purchase status: New
- Disposal date: 3/14/2008
Fiscal year | Net value | Ordinario depreciation charge Anticipato depreciation charge | Fiscal year total |
1/1/2006 – 12/31/2006 | 10,000.00 | (1) 1,250.00 1,000.00 | 2,250.00 |
1/1/2007 – 12/31/2007 | 7,750.00 | 2,500.00 2,000.00 | 6,750.00 |
1/1/2008 – 12/31/2008 | 3,250.00 | (2) 0.00 0.00 | 6,750.00 |
(1) (10 000,00 * 25% * 1/2) and (10 000 ,00 * 20% * 1/2) since in the absence of option Investment fiscal year prorata a ½ annuity is applied, for a Tangible asset.
(2) In the absence of option Disinvestment fiscal year prorata, no depreciation charge is calculated for the disposal fiscal year.
11th example
- Gross value: 10,000
- Residual value: 0
- Depreciation start date: 3/1/2006
- Ordinario rate: 25%
- Anticipato rate: 20 % for each of the first 3 fiscal years
- Fixed asset type: Tangible
- Purchase status: New
- Disposal date: 3/14/2008
- Method option: Disinvestment fiscal year prorata
Fiscal year | Reval. | Ordinario depreciation charge Anticipato depreciation charge | Fiscal year total |
1/1/2006 – 12/31/2006 | 10,000.00 | (1) 1,250.00 1,000.00 | 2,250.00 |
1/1/2007 – 12/31/2007 | 7,750.00 | 2,500.00 2,000.00 | 6,750.00 |
1/1/2008 – 12/31/2008 | 3,250.00 | (2) 505.46 (3) 151.64 | 7,407.10 |
(1) (10 000,00 * 25% * 1/2) and (10 000 ,00 * 20% * 1/2) since in the absence of option Investment fiscal year prorata, a ½ annuity is applied, for a Tangible asset.
(2) (10 000,00 * 25%) * 74/366 = 505,46 : due to the presence of option Disinvestment fiscal year prorata, a prorata temporis is applied until the disposal day.
(3) 750,00 * 74/366 = 151,64 : (10 000,00 * 20%) * 74/366 is not retained, for if the asset had not been issued, the Anticipato depreciation charge would have been restricted to 750,00 (see example 9).