Australian standard 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 Australian legislation.

The other methods are described in appendix documentations, which can be accessed from the documentation on the depreciation methods common to all legislations.

AL - Prime cost

This is a linear depreciation method used in Australia.

  • Ex-tax receipt value: 1,500
  • First use date: 7/1/2011
  • Depreciation start date: 7/1/2011
  • Depreciation duration: 5 years
  • Non-taxability rate of 20%

Fiscal year depreciation plan:

Fiscal year

Depreciation total

Fiscal year charge

Fiscal year end NV

7/1/2011 - 6/30/2012

---

300.82

1,199.18

7/1/2012 - 6/30/2013

300.82

300.00

899.18

7/1/2013 - 6/30/2014

600.82

300.00

599.18

7/1/2014 - 6/30/2015

900.82

300.00

299.18

7/1/2015 - 6/30/2016

1,200.82

299.18

0.00

First FY period depreciation plan:

Period

Depreciation total

Period charge

Charge to post

Period end NV

7/1/2011 - 7/31/2011

---

25.48

20.38 (1)

1,474.52

8/1/2011 - 8/31/2011

25.48

25.48

20.38

1,449.04

9/1/2011 - 9/30/2011

50.96

24.66

19.73

1,424.38

10/1/2011 - 10/31/2011

75.62

25.48

20.38

1,398.90

11/1/2011 - 11/30/2011

101.10

24.65

19.72

1,374.25

12/1/2011 - 12/31/2011

125.75

25.48

20.38

1,348.77

1/1/2012 - 1/31/2012

151.23

25.48

20.38

1,323.29

2/1/2012 - 2/29/2012

176.71

23.84

19.07

1,299.45

3/1/2012 - 3/31/2012

200.55

25.48

20.38

1,273.97

4/1/2012 - 4/30/2012

226.03

24.65

19.72

1,249.32

5/1/2012 - 5/31/2012

250.68

25.48

20.38

1,223.84

6/1/2012 - 6/30/2012

276.16

24.66

19.73

1,199.18

Depreciation origin

The depreciation is calculated from the day of effective first use of each depreciable element onwards. Because of this, Sage X3 retains the day specified as depreciation start date.

Duration

You must enter it, in years and thousandth of years, under the format: YY,nnn

6 years 2/3 = 6,667

Portion of the year

Number of months

nnn value

1

0.083

2

0.167

1/4

3

0.250

1/3

4

0.333

5

0.417

1/2

6

0.500

7

0.583

2/3

8

0.667

3/4

9

0.750

10

0.833

11

0.917

Rate

You cannot enter the depreciation rate. It is automatically calculated as follows: 1 / duration

The displayed rate corresponds to the rate thus calculated, rounded to the 6th decimal digit.

The rate used for the calculation is not rounded.

Depreciation end date

The depreciation end date is determined from the depreciation start date and the depreciation duration.

Prorata temporis

The prorata temporis is only expressed in days.

Special features

Non-taxability rate

You can enter, at the depreciation plan level, a non-taxability rate. You need to enter this rate in the Exceptional depreciation rate field.

When entered, this rate is applied to the amount of the depreciation charge in order to determine the amount to be posted.

Example:

There is a depreciation charge amount of 300 and a non-taxability rate of 20%.

The posted amount is 300 - (300*20%) = 240.

You can modify the Exceptional depreciation rate with the Method change action.

Depreciation charges

The depreciation charge is calculated in the following way:

Depreciable value * (holding duration in days / 365) / asset lifetime

For leap years, the holding duration is 366.

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 according to the number of days in the periods.

The number of days specified in the Depreciation context setup is considered in the depreciation charge calculation.

AD - Diminishing value

This is a constant declining depreciation method used in Australia, an application of the rate to the net value without switching to straight-line.

  • Ex-tax receipt value: 1,500
  • First use date: 7/1/2011
  • Depreciation start date: 7/1/2011
  • Depreciation duration: 5 years
  • Non-taxability rate of 20%
  • MINFIYDEP - Minimum FY deprec expense parameter (chapter AAS, group CLC) = 0

Fiscal year depreciation plan

Fiscal year

Depreciation total

Fiscal year charge

Fiscal year end NV

7/1/2011 - 6/30/2012

---

601.64.

898.36.

7/1/2012 - 6/30/2013

601.64.

359.34.

539.02.

7/1/2013 - 6/30/2014

960.98.

215.61.

323.41.

7/1/2014 - 6/30/2015

1,176.59.

129.36.

194.05.

7/1/2015 - 6/30/2016

1,305.95.

77.83.

116.22.

...

First fiscal year period depreciation plan

Period

Depreciation total

Period charge

Charge to post

Period end NV

7/1/2011 - 7/31/2011

---

50.96.

40.77.

1,449.04

8/1/2011 - 8/31/2011

50.96.

50.96.

40.77.

1,398.08.

9/1/2011 - 9/30/2011

101.92.

49.31.

39.45.

1,348.77.

10/1/2011 - 10/31/2011

151.23.

50.96.

40.77.

1,297.81.

11/1/2011 - 11/30/2011

201.19.

49.32.

39.46.

1,248.49.

12/1/2011 - 12/31/2011

251.51.

50.95.

40.76.

1,197.54.

1/1/2012 - 1/31/2012

302.46.

50.96.

40.77.

1,146.58.

2/1/2012 - 2/29/2012

353.42.

47.67.

38.14.

1,098.91.

3/1/2012 - 3/31/2012

401.09.

50.96.

40.77.

1,047.95.

4/1/2012 - 4/30/2012

452.05.

49.32.

39.46.

998.63.

5/1/2012 - 5/31/2012

501.37.

50.96.

40.77.

947.67.

6/1/2012 - 6/30/2012

552.33.

49.31.

39.45.

898.36.

Depreciation origin

The depreciation is calculated from the day of effective first use of each depreciable element onwards. Because of this, Sage X3 retains the day specified as depreciation start date.

Duration

You must enter it, in years and thousandth of years, under the format: YY,nnn

6 years 2/3 = 6,667

Portion of the year

Number of months

nnn value

1

0.083

2

0.167

1/4

3

0.250

1/3

4

0.333

5

0.417

1/2

6

0.500

7

0.583

2/3

8

0.667

3/4

9

0.750

10

0.833

11

0.917

Rate

You cannot enter the depreciation rate. It is automatically calculated as follow: 1 / duration * declining coefficient

The declining coefficient value depends on the asset purchase date (PURDAT):

  • 1.5 for assets purchased before May 10th, 2006.
  • 2 for assets purchased from May 10th, 2006.

The displayed rate corresponds to the rate thus calculated, rounded to the 6th decimal digit.

The rate used for the calculation is not rounded.

Depreciation end date

The depreciation end date is determined from the depreciation start date and the depreciation duration.

Since this is a declining depreciation, as a general rule the depreciation is never closed. Consequently, the net value of the asset may be different from zero. To avoid this situation, it is possible to indicate via the MINFIYDEP - Minimum FY deprec expense parameter (chapter AAS, group CLC), the FY deprec expense/charge value below which the NV must be closed.

Prorata temporis

The prorata temporis is only expressed in days.

Special features

Non-taxability rate

You can enter, at the depreciation plan level, a non-taxability rate. You need to enter this rate in the Exceptional depreciation rate field.

When entered, this rate is applied to the amount of the depreciation charge in order to determine the amount to be posted.

Example:

There is a depreciation charge amount of 300 and a non-taxability rate of 20%.

The posted amount is 300 - (300 * 20%) = 240.

You can modify the Exceptional depreciation rate with the Method change action.

Depreciation charges

The depreciation charge is calculated in the following way:

Depreciable value * (holding duration in days / 365) * (2 / asset lifetime)

For leap years, the holding duration is 366.

Distribution of the fiscal year charge on the periods

If the fiscal year is divided into several periods, the fiscal year charge is prorated over these periods according to the number of days in the periods.

The number of days specified in the Depreciation context setup is considered in the depreciation charge calculation.