Australian standard depreciation method description

AL - Prime cost

This is a linear depreciation method used in Australia.

Depreciation origin

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

Duration

It must be entered by the user, in years and thousandth of years, under the format: YY,nnn

For example: 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

The depreciation rate cannot be entered by the user. 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 systematically expressed in days.

Special features

Non-taxability rate

It is possible to enter, at the depreciation plan level, a non-taxability rate. This rate must be entered in the "Exceptional depreciation rate" field.

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

For example:

Let a depreciation charge amount of 300 and a non-taxability rate of 20%.
The posted amount is 300 - (300*20%) = 240.

 It is possible to modify the "Exceptional depreciation rate" via 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 taken into account in the depreciation charge calculation.

Example

• 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.

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.

AD - Diminishing value

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

Depreciation origin

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

Duration

It must be entered by the user, in years and thousandth of years, under the format: YY,nnn

For example: 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

The depreciation rate cannot be entered by the user. It is automatically calculated as follows: 1 / duration * degressivity coefficient

The degressivity 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 parameterMINFIYDEP - Minimum FY deprec expense(chapter AAS, group CLC), the FY deprec expense/charge value below which the NV must be closed.

Prorata temporis

The prorata temporis is systematically expressed in days.

Special features

Non-taxability rate

It is possible to enter, at the depreciation plan level, a non-taxability rate. This rate must be entered in the "Exceptional depreciation rate" field.

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

For example:

Let a depreciation charge amount of 300 and a non-taxability rate of 20%.
The posted amount is 300 - (300*20%) = 240.

 It is possible to modify the "Exceptional depreciation rate" via the Method change action.

Depreciation charges

The depreciation charge is calculated in the following way :

Depreciable net 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 taken into account in the depreciation charge calculation.

Example

• 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 %:
• Parameter MINFIYDEP - Minimum FY deprec expense = 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 FY 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.