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 French legislation.

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

CA - Amortization expense/gross value

It is the straight-line depreciation method applied according to French rules.

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

The user can specify either the duration, either the rate.
If the duration is specified by the user, Sage X3 automatically determines the depreciation rate as well as the depreciation end date based on this duration. If the rate is specified, the depreciation duration is automatically determined based on the entered rate.

The duration is expressed in years and hundredths of years.
For example : 6.66 or 6.67 for a duration of 6 years and 2/3. 

Rate

The rate can be specified by the user.
In this case, Sage X3 determines the depreciation duration based on the rate entered. This determined duration will be used to calculate the depreciation end date.

In the case when the depreciation rate is not specified by the user, Sage X3 will determine it as follows: 1 / duration

Depreciation end date

The end date depends on whether the Specific rule is applied or not:1st fiscal year counted for 1 year.
This rule, specified at asset depreciation schedule level, is set by the user or comes from the application of section associations.

  • If this rule is not applied, the end date is equal to:
    depreciation launch day + depreciation duration.
  • When this rule is applied, the depreciation end date is calculated as if the asset were depreciated with methodFrench declining.

A few examples made without application of the rule: 1st fiscal year counted for 1 year.

Start date

Depreciation duration

End date

1/1/2005

5 years

12/31/2009

7/1/2005

5 years

6/30/2010

3/14/2005

5 years

3/13/2010

1/1/2005

6.66

8/31/2011

7/1/2005

3.33

10/31/2008

3/14/2005

3.33

7/13/2008

 

Prorata temporis

The prorata temporis is systematically expressed in days. It is applied in the following situations:

  • During the acquisition fiscal year, if the depreciation start date is not the first day of the fiscal year.
  • If the fiscal year duration differs from 1 year.
  • During a fiscal year to which several depreciation rates are applied.
  • During the disinvestment fiscal year: the charge is calculated until disposal day.
    This rule can be modified by Disposal rules: Disposal at the end of the previous FY, Disposal at the end of the current FY and No depreciation charge on the disposal day

Specific rules

For this depreciation method, 2 specific rules are available:

1st fiscal year counted for 1 year.
This rule affects the determination of theDepreciation end date.

Software, 12 months
This rule, which is authorized only for this depreciation method, can be used for accelerated software depreciation over 12 months.
It can be chosen by the user or determined by the section associations.

  • The depreciation origin is necessarily the 1st day of the month entered in the depreciation start date.
  • The duration, which is necessarily of 1 year, cannot be modified.
  • The depreciation rate, which is automatically loaded with 100%, cannot be modified.
  • The depreciation end date is equal to: 1st day of the month of the depreciation start date + 12 months
  • The prorata temporis is systematically applied in months. It is applied in the following situations:
     
    - During the acquisition fiscal year, if the depreciation start date is not the first day of the fiscal year.
     
    - During a fiscal year to which several depreciation rates are applied.
     
    - During the disinvestment fiscal year: the charge is calculated until the disposal date. Otherwise, the charge is calculated until the end of the previous month. 
    This rule can be modified by Disposal rules: Disposal at the end of the previous FY and Disposal at the end of the current FY.
  •  The depreciation charge for the fiscal year is equal to:
                       Depreciable value * Depreciation rate * prorata temporis in months
  • The distribution of the fiscal year charge over the periods is carried out according to the following rule:

    Period Charge (pc) = 
    Fiscal year charge *

    [ S p1 to pc ( (Period weight / Number of months in the period) * Number of holding months in the period )

    /

    S p1 to pf ( (Period weight / Number of months in the period) * Number of holding months 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
     
    (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

Depreciation charges

The fiscal year charge is equal to:
Depreciable value * Depreciation rate * prorata temporis in days

 Notes:
- Depreciable value = (Gross value – Residual value)
- Gross value = Depreciation basis
- The value of the depreciation rate used depends on the parameterRNDCHGLPDF: if it is set to No, the rate is rounded to 4 decimals - if it is set to Yes, the rate is determined without any rounding.
- If the option Priority to the rate is not specified at Depreciation method setup level, the depreciation end date has priority over the rate. In this case, if the depreciation end date is in the calculated period or fiscal year, the depreciation is closed. Net value - Residual value.

..\FCT\SEEWARNINGImportant note:
It is possible to observe a small difference in the calculation results of an LP-mode depreciation method between Abel X3 (version 140) and the current version of Sage X3. This difference is normal and can occur when theRNDCHGLPDFparameter is set to No. It occurs because in that case, in the current version of Sage X3, the rate is rounded to the 4th decimal.

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. This distribution is applied according to the following rule:

Period Charge (pc) = 
Fiscal year charge *

[ S p1 to pc ( (Period weight / Number of days in the period) * Number of holding days in the period )
/
S p1 to pf ( (Period weight / Number of days in the period) * 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
 
(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

Examples

1st example 
  • Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 11/5/2005
  • Depreciation duration: 5 years, Rate: 20% --> Depreciation end date: 11/4/2010
  •  Specificity: the second fiscal year has a duration of 6 months

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1)  312.33

312.33

1/1/2006 – 6/30/2006

9,687.67

(2) 991.78

1,304.11

7/1/2006 – 6/30/2007

8,695.89

2,000.00

3,304.11

7/1/2007 – 6/30/2008

6,695.89

2,000.00

5,304.11

7/1/2008 – 6/30/2009

4,695.89

2,000.00

7,304.11

7/1/2009 – 6/30/2010

2,695.89

2,000.00

9,304.11

7/1/2010 – 6/30/2011

695.89

695.89

10,000.00

(1) 10,000.00 * 20% * 57/365 since the asset is held only for 57 days during this 1st fiscal year.

(2) 10,000.00 * 20% * 181/365 since the duration of this 2nd fiscal year is 6 months = 181 days.

2nd example 
  • Gross value: 10,000
  • Residual value: 0
  • Depreciation start date: 2/28/2005
  • Depreciation duration: 6.67 years. Rate: 15 % --> Depreciation end date: 10/27/2011

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 1,261.64

1,261.64

1/1/2006 – 31/12/2006

8,738.36

(2) 1,500.00

2,761.64

01/01/2007 – 31/12/2007

7,238.36

1,500.00

4,261.64

01/01/2008 – 31/12/2008

5,738.36

1,500.00

5,761.64

01/01/2009 – 31/12/2009

4,238.36

1,500.00

7,261.64

01/01/2010 – 31/12/2010

2,738.36

1,500.00

8,761.64

01/01/2011 – 31/12/2011

1,238.36

1,238.36

10,000.00

(1) 10,000.00 * 15% * 307/365 since the asset has been held for 307 days during this 1st fiscal year.

(2) 10,000.00 * 15% = 1,500.00

3rd example 
  • Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 2/28/2005
  • Depreciation duration: 6.67 years. Rate: 15 % --> Depreciation end date: 10/27/2011
  • Disposal date: 04/05/2008

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 1,261.64

1,261.64

1/1/2006 – 31/12/2006

8,738.36

1,500.00

2,761.64

01/01/2007 – 31/12/2007

7,238.36

1,500.00

4,261.64

01/01/2008 – 31/12/2008

5,738.36

(2) 512.30

4,773.94

(1) 10,000,00 * 15% * 307/365 since the asset has been held for 307 days during this 1st fiscal year.
(2) 10 000,00 * 15% * 125/366 = 512.30 for the asset has been held for 125 weeks during this fiscal year

4th example 
  • Gross value: 10,000
  • Residual value: 0
  • Depreciation start date: 6/1/2005
  • Depreciation duration: 4 years. Rate: 25 % --> Depreciation end date: 5/31/2009
     

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 1,465.75

1,465.75

1/1/2006 – 31/12/2006

8,534.25

2,500.00

3,965.75

01/01/2007 – 31/12/2007

6,034.25

2,500.00

6,465.75

01/01/2008 – 31/12/2008

3,534.25

2,500.00

8,965.75

01/01/2009 – 31/12/2009

1,034.25

1,034.25

10,000.00

(1) 10,000.00 * 25% * 214/365 since the asset has been held for 214 days during this 1st fiscal year.  

Distribution of the 2005 fiscal year charge based on the weight of the periods:

Period

Number of days / Weight

Number of holding days

Charge

01/01/2005 – 31/03/2005

90 / 90

0

0.00

01/04/2005 – 30/06/2005

91 / 90

30

(2) 242.05

01/07/2005 – 30/09/2005

92 / 60

92

(3) 489.48

10/1/2005 – 12/30/2005

92 / 90

92

(4) 734.22

Fiscal year 2005 total

1,465.75

(2)  1,465.75 * (90 / 91 * 30) / [ (90 / 91 * 30) + (60 / 92 * 92) + (90 / 92 * 92) ] = 242,05  

(3)  1,465.75 * [ (90 / 91 * 30) + (60 / 92 * 92) ] 
      / [ (90 / 91 * 30) + (60 / 92 * 92) + (90 / 92 * 92) ] = 731.53 - 242.05 = 489.48

 (4)  1,465.75 * [ (90 / 91 * 30) + (60 / 92 * 92) + (90 / 92 * 92) ] 
        / [ (90 / 91 * 30) + (60 / 92 * 92) + (90 / 92 * 92) ] = 1,465.75 - 731.53 = 734.22

5th example with application of the Specific rule: 1st fiscal year counted for 1 year
  • Gross value: 10,000
  • Residual value: 0
  • Depreciation start date: 6/1/2005
  • Depreciation duration: 4 years. Rate: 25 % --> Depreciation end date: 31/12/08

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 1,465.75

1,465.75

1/1/2006 – 31/12/2006

8,534.25

2,500.00

3,965.75

01/01/2007 – 31/12/2007

6,034.25

2,500.00

6,465.75

01/01/2008 – 31/12/2008

3,534.25

(2) 3,534.25

10,000.00

(1) 10,000.00 * 25% * 214/365 since the asset has been held for 214 days during this 1st fiscal year.

(2) Charge = (Ne value – Residual value), that is (3,534.25 – 0.00) = 3,534.25. Taking into account the fact that the 1st 12-month fiscal year [01/01/2005 – 31/01/2005] is counted for 1 year and that there has been no fiscal year different from 12 months during the asset depreciation.

DF - French declining

It is the declining depreciation method applied according to French rules. This depreciation method can be applied to any plan other than the IAS/IFRS plan.

Depreciation origin

The declining depreciation origin extends from the first day of the acquisition month or from the creation of the element subject to this rule.

..\FCT\SEEINFO It is possible to specify a depreciation start date different from the acquisition date. However, taking into account the prorata temporis in months that is applied to this declining method, the depreciation origin will always be the first day of the specified month, whatever the day specified for this depreciation start date is.

Duration

It is necessarily greater or equal to 3 years and must be specified by the user, in years and hundredths of years.

For example: 6 years 2/3 = 6,66 or 6,67.

..\FCT\SEEINFO For this depreciation method, Sage X3 will round to 2 decimals all the durations entered or imported with more than 2 decimals. Ditto for residual durations calculated in the framework of intra-group sales.

Rate

The applicable rate for declining depreciation calculation is obtained by multiplying the straight-line depreciation rate corresponding to the standard use duration of the fixed asset by a coefficient that varies based on this duration.

This variable coefficient is called digressivity factor.
It varies:

  • depending on depreciation duration:
    - Duration = 3 years and < 5 years
    - Duration = 5 years and = 6 years
    - Duration > 6 years
  • depending on the year of acquisition of the fixed asset:
    - Acquired before 01/01/2001
    - Acquired from 01/01/2001 onwards
    - Acquired during the period [01/02/1996 – 31/12/1997]
    - Acquired during the period [04/12/2008 – 31/12/2009]

Grid of digressivity factors and depreciation rates applied to assets in general, according to the depreciation duration and on the acquisition date:
 

 

Grid A

Grid B

Grid C

Grid D

Depreciation duration

of depreciation

Acquired before 01/01/2001

Acquired from 01/01/2001 onwards

Acquired during the period [01/02/1996 – 31/01/1997]

Acquired during the period [04/12/2008 – 31/12/2009]

Coefficient

Rate

Coefficient

Rate

Coefficient

Rate

Coefficient

Rate

3 years

1.5

50%

1.25

41.67%

2.5

83.33%

1.75

58.33%

4 years

1.5

37.5%

1.25

31.25%

2.5

62.5%

1.75

43.75%

5 years

2

40%

1.75

35%

3

60%

2.25

45%

6 years

2

33.33%

1.75

29.17%

3

50%

2.25

37.50%

6 2/3 years

2.5

37.5%

2.25

33.75%

3.5

52.5%

2.75

41.25%

8 years

2.5

31.25%

2.25

28.13%

3.5

43.75%

2.75

34.38%

10 years

2.5

25%

2.25

22.5%

3.5

35%

2.75

27.50%

12 years

2.5

20.83%

2.25

18.75%

3.5

29.17%

2.75

22.92%

15 years

2.5

16.67%

2.25

15%

3.5

23.33%

2.75

18.33%

20 years

2.5

12.5%

2.25

11.25%

3.5

17.5%

2.75

13.75%

  • It also varies depending on certain financial helps (LM 3168 - Specific depreciation rules) allocated according to the destination of the assets. A financial help is applied at the request of the user, by selecting a Specific rule. The application of a Specific rule corresponding to a financial help is authorized only on the fiscal plan.
    This various financial helps constitute an accelerated depreciation, integrated to the normal charge: the part of the charge that corresponds to the depreciation increase is not isolated from the normal charge.

    - Accelerated declining depreciation for the materials destined for energy saving and equipment of renewable energy production acquired or produced between 01/01/2001 and 01/01/2003: for these assets, the applicable digressivity factors are 2, 2.5 and 3. See table E below (1).
     
    - Accelerated declining depreciation for the materials and tools used for scientific and technical research acquired or produced from 01/01/2004 onwards: for these assets, the applicable digressivity factors are 1.5, 2 et 2.5. See table F below (1).
     
    - 1-point increase of the factor for certain assets (depreciable over a duration of 8 years) made available to a company which uses them as part of its normal activity.
     
    - 30%-increase of the depreciation carried out over the first 12 months following the acquisition; this measure is specific to investments performed between 17/10/2001 and 31/03/2002.
     
    - 30%-increase of the declining rate in use on the closing date of each fiscal years for which the measure specific to wood-processing companies is applied. This measure applies to the assets acquired within the following date range:
    *26/09/2008 - 31/12/2011
    *13/11/2013 - 31/12/2016 
     
    - 40% deduction on the acquisition amount. This measure applies to the depreciable assets of a company subject to the French legislation acquired within the following date range:
    * 15/04/2015 - 14/04/2016
    This deduction is broken down in a linear fashion over the depreciation duration of the asset (with the application, if necessary, of a prorata on the acquisition year and on the depreciation end year). Unlike other financial helps, the deduction is not integrated into the normal charge. It is a non-accounting/financial help that is not taken into account. It appears in the column Financial Help at the depreciation plan level. 
    To view the comprehensive framework of how the deduction is applied, see the official text: BOI-BIC-BASE-100-20150421.

(1) Grid of digressivity factors and depreciation rates applied to materials destined for energy saving and to materials and tools used for scientific and technical research:

 

Grid E

Grid F

Depreciation duration

Materials used for energy saving, acquired during the period [01/01/01 – 01/01/03]

Materials used for research, acquired from 01/01/2004 onwards

Coefficient

Rate

Coefficient

Rate

3 years

2

66.67%

1.5

50%

4 years

2

50%

1.5

37.5

5 years

2.5

50%

2

40%

6 years

2.5

41.67%

2

33.33%

6 2/3 years

3

45%

2.5

37.5%

8 years

3

37.5%

2.5

31.25%

10 years

3

30%

2.5

25%

12 years

3

25%

2.5

 

15 years

3

20%

2.5

 

20 years

3

15

2.5

 

Depreciation end date

  • It is determined as follows:

    Next fiscal year start date (1) + Number of years remaining for depreciation

    With:
    Number of years remaining for depreciation =
    ( Depreciation duration – Period duration [Acquisition fiscal year start date – Current fiscal year end date] )

    To perform this calculation, the depreciation duration and the due period duration are calculated in months and then converted into years. If this result does not correspond to a round number of years, the higher rounded number of years is retained.

    (1) This is:
    - the next fiscal year relative to the current fiscal year of the depreciation context, for the assets that are acquired during the current fiscal year or that precede this fiscal year,
    - the fiscal year that follows the acquisition fiscal year, for the assets that follow the current fiscal year.

Prorata temporis

Time is expressed in months. A prorata temporis applies in the following cases:

  •  During the acquisition fiscal year, if the depreciation origin is not the first day of the fiscal year.
    If the fiscal year start date is not the first day of the month, taking into account the applicable prorata temporis in months, Sage X3 retains the 1st day of the month as fiscal year start date.
  • If the duration of a fiscal year differs from 12 months.
  • During the disinvestment fiscal year: the charge is calculated until the end of the month preceding the asset disposal month, or up to the end of the asset disposal month if this date corresponds to the last day of a month.
    This rule can be modified by Disposal rules: Disposal at the end of the previous FY and Disposal at the end of the current FY.

Depreciation charges

  • The depreciation charge of the 1st fiscal year is equal to:
       Depreciable value * rate * prorata temporis (number of holding months / 12)
     
    A Prorata temporis in months is applied in the following cases:
     
    - The Depreciation start date is beyond the fiscal year start date
    - The fiscal year Duration differs from 12 months
    - The Disposal date of the asset is in the interval [Fiscal year start date – Fiscal year end date]
  • The depreciation charge of the next fiscal years is equal to:
    Net depreciable value of fiscal year start * rate * prorata temporis (number of holding months / 12)
     
    A Prorata temporis is applied in the following cases:
     
    - The fiscal year Duration differs from 12 months
    - The Disposal date of the asset is in the interval [Fiscal year start date – Fiscal year end date] 

    The calculation above is replaced with:
    Net depreciable value at fiscal year start / Residual depreciation duration a fiscal year start, if the amount obtained is larger than: Net depreciable value at fiscal year start * rate.
    If the Net depreciable value at fiscal year start / Residual depreciation duration at fiscal year start, a Proratatemporis is applied in the following cases:
     
    - The fiscal year Duration differs from 12 months
    - The Disposal date of the asset is in the interval [Fiscal year start date – Fiscal year end date] 
     
    If the depreciation end date is earlier than the fiscal year start date, the fiscal year charge will automatically be loaded with the net depreciable value, so as to close the depreciation.
     

Notes:
 
- Depreciable value = Gross value – Residual value
- Net depreciable value = Net value – Residual value
- Residual duration = Number of whole years in the period [Fiscal year stat date – Depreciation end date]

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 / Number of months in the period) * Number of holding months in the period )
/
Σ p1 to pf ( (Period weight / Number of months in the period) * Number of holding months 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

 (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

Examples

1st example 
  •  Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 11/5/2005
  •  Depreciation duration: 5 years, Rate: 35 %
  • Specificity: the second fiscal year has a duration of 6 months
     

    Fiscal year

    Net value

    Fiscal year charge

    Fiscal year total

    01/01/2005 – 31/12/2005

    10,000.00

    (1)  583.33

    583.33

    1/1/2006 – 6/30/2006

    9,416.67

    (2) 1,647.92

    2,231.25

    7/1/2006 – 6/30/2007

    7,768.75

    2,719.06

    4,950.31

    7/1/2007 – 6/30/2008

    5,049.69

    1,767.39

    6,717.70

    7/1/2008 – 6/30/2009

    3,282.30

    (3) 1,641.15

    8,358.85

    01/07/2009 – 30/06/2010 (4)

    1,641.15

    1,641.15

    10,000.00

(1) 10,000.00 * 35% * 2/12 since the asset is held for only 2 months during this 1st fiscal year.

(2) 9,416.67 * 35% * 6/12 since the duration of this 2nd fiscal year is 6 months.

(3) 3,282.30 / 2 residual years = 1,641.15 > 3,282.30 * 35% = 1,148.81

(4) The depreciation end date is 30/06/2010

2nd example 
  •  Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 7/3/2003
  •  Depreciation duration: 5 years, Rate: 35 %
  • Specificity: the 4th fiscal year has a duration of 6 months

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2003 – 31/12/2003

10,000.00

(1) 1,750.00

1,750.00

1/1/2004 – 12/31/2004

8,250.00

2,887.50

4,637.50

1/1/2005 – 12/31/2005

5,362.50

1,876.88

6,514.38

1/1/2006 – 6/30/2006

3,485.62

(2) 609.98

7,124.36

7/1/2006 – 6/30/2007

2,875.64

(3) 1,437.82

8,562.18

01/07/2007 – 30/06/2008 (4)

1,437.82

1,437.82

10,000.00

(1) 10,000.00 * 35% * 6/12 since the asset is held for only 6 months during this 1st fiscal year.

(2) 3,485.62 * 35% * 6/12 for the duration of this 4th fiscal year is 6 months.

(3) 2,875.64 / 2 residual years = 1,437.82 > 2,875.64 * 35% = 1,006.47

(4) The depreciation end date is 30/06/2008

3rd example 
  •  Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 03/07/2002
  •  Depreciation duration: 5 years, Rate: 35 %

Specificity: the 5th fiscal year has a duration of 6 months

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2002 – 31/12/2002

10,000.00

(1) 1,750.00

1,750.00

1/1/2003 – 12/31/2003

8,250.00

2,887.50

4,637.50

1/1/2004 – 12/31/2004

5,362.50

1,876.88

6,514.38

1/1/2005 – 12/31/2005

3,485.62

(2) 1,742.81

8,257.19

1/1/2006 – 6/30/2006

1,742.81

(3) 435.70

8,692.89

01/07/2006 – 30/06/2007 (4)

1,307.11

1,307.11

10,000.00

(1) 10,000.00 * 35% * 6/12 since the asset is held for only 6 months during this 1st fiscal year.

(2) 3,485.62 / 2 residual years

(3) 1,742.81 / 2 residual years * 6/12 for the duration of this 5th fiscal year is 6 months.

(4) The depreciation end date is 30/06/2007
 

4th example 
  •  Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 03/07/2002
  •  Depreciation duration: 5 years, Rate: 35 %
  • Specificity: the 5th fiscal year has a duration of 6 months
  • Disposal date: 15/05/2006

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2002 – 31/12/2002

10,000.00

(1) 1,750.00

1,750.00

1/1/2003 – 12/31/2003

8,250.00

2,887.50

4,637.50

1/1/2004 – 12/31/2004

5,362.50

1,876.88

6,514.38

1/1/2005 – 12/31/2005

3,485.62

1,742.81

8,257.19

01/01/2006 – 30/06/2006 (3)

1,742.81

(2) 290.47

8,838.13

(1) 10,000.00 * 35% * 6/12 since the asset is held for only 6 months during this 1st fiscal year.

(2) 1,742.81 / 2 residual years * 4/12 for the asset has been held for 4 months in this 5th fiscal year.

(3) The depreciation end date is 30/06/2007

5th example 
  •  Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 03/07/2002
  •  Depreciation duration: 5 years, Rate: 35 %
  • Specificity: the 5th fiscal year has a duration of 18 months
  • Disposal date: 30/06/06

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2002 – 31/12/2002

10,000.00

(1) 1,750.00

1,750.00

1/1/2003 – 12/31/2003

8,250.00

2,887.50

4,637.50

1/1/2004 – 12/31/2004

5,362.50

1,876.88

6,514.38

1/1/2005 – 12/31/2005

3,485.62

1,742.81

8,257.19

1/1/2006 – 6/30/2007

1,742.81

(2) 871.41

9,128.60

 (1) 10,000.00 * 35% * 6/12 since the asset is held for only 6 months during this 1st fiscal year.

(2) 1,742.81 * 6/12 since the asset has been held for 6 months in this 5th fiscal year: 12th are applied even if the fiscal year has a duration of 18 months, because the depreciation end date of the asset is the 31/12/2006.

6th example 
  •  Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 6/1/2005
  •  Depreciation duration: 4 years, Rate: 31,25 % --> Depreciation end date = 12/31/2008

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 1,822.92

1,822.92

1/1/2006 – 31/12/2006

8,177.08

2,725.69

4,548.61

01/01/2007 – 31/12/2007

5,451.39

2,725.70

7,274.31

01/01/2008 – 31/12/2008

2,725.69

2,725.69

10,000.00

(1) 10,000.00 * 31,25% * 7/12 since the asset has been held for 7 months during this 1st fiscal year.

Distribution of the 2005 fiscal year charge based on the weight of the periods:

Period

Number of months / Weight

Number of holding months

Fiscal

01/01/2005 – 31/03/2005

03 / 03

0

0.00

01/04/2005 – 30/06/2005

03 / 03

01

(2) 260.42

01/07/2005 – 30/09/2005

03 / 03

03

(3) 781.25

10/1/2005 – 12/30/2005

03 / 03

03

(4) 781.25

Fiscal year 2005 total

1,822.92

(2)  1,822.92 * (03 / 03 * 01) / [ (03 / 03 * 01) + (03 / 03 * 03) + (03 / 03 * 03) ] = 260.42
(3)  1,822.92 * [ (03 / 03 * 01) + (03 / 03 * 03) ] 

/ [ (03 / 03 * 01) + (03 / 03 * 03) + (03 / 03 * 03) ] = 1,041.67 – 260.42 = 781.25
(4)  1,822.92 * [ (03 / 03 * 01) + (03 / 03 * 03) + (03 / 03 * 03) ] 

/ [ (03 / 03 * 01) + (03 / 03 * 03) + (03 / 03 * 03) ] = 1,822.92 – 1,041.67 = 781.25

Distribution of the 2005 fiscal year charge based on the weight of the periods.
In this example, August is not taken into account, so the weight of the 3rd quarter is equal to 2 months:

Period

Number of months / Weight

Number of holding months

Fiscal

01/01/2005 – 31/03/2005

03 / 03

0

0.00

01/04/2005 – 30/06/2005

03 / 03

01

(2) 303.82

01/07/2005 – 30/09/2005

03 / 02

03

(3) 607.64

10/1/2005 – 12/30/2005

03 / 03

03

(4) 911.46

Fiscal year 2005 total

1,822.92

(2) 1,822.92 * (03 / 03 * 01) / [ (03 / 03 * 01) + (02 / 03 * 03) + (03 / 03 * 03) ] = 303.82

(3) 1,822.92 * [ (03 / 03 * 01) + (02 / 03 * 03) ] 

/ [ (03 / 03 * 01) + (02 / 03 * 03) + (03 / 03 * 03) ] = 911.46 – 303.82 = 607.64

(4) 1,822.92 * [ (03 / 03 * 01) + (02 / 03 * 03) + (03 / 03 * 03) ] 

/ [ (03 / 03 * 01) + (02 / 03 * 03) + (03 / 03 * 03) ] = 1,822.92 – 911.46 = 911.46

FM - Forms and molds

This is a depreciation method specific to French accountability and tax system.
It can be applied to manufacturing forms and molds.

Depreciation origin

It is systematically equal to the 1st day of the month specified as depreciation start date.

Duration

The duration is systematically and mandatorily equal to 3 years.

Rate

The rate can neither be enter, nor determined by section associations. It is automatically determined by Sage X3.  
The rate changes over time:

  • 50% in the first 12 months 
  • 30% in the next 12 months
  • 20% in the last 12 months

Depreciation end date

It is systematically determined by the application. It is equal to:

1st day of the month entered as Depreciation start date + 3 years

Examples:

Start date

End date

8/1/2005

7/31/2008

2/7/2005

1/31/2008

Prorata temporis

The prorata temporis is systematically expressed in months. It is applied in the following situations:

  • During the acquisition fiscal year, if the depreciation start date is not the first day of the fiscal year.
  • If the fiscal year duration differs from 1 year.
  • During a fiscal year to which several depreciation rates are applied.
  • During the disinvestment fiscal year: the charge is calculated until the disposal day if the day of the disposal date is the last of the month; otherwise, the charge is calculated until the end of the month that precedes the disposal.
    This rule can be modified by Disposal rules: Disposal at the end of the previous FY and Disposal at the end of the current FY.

Depreciation charges

The fiscal year charge is equal to: Depreciation charge at 50% + Depreciation charge at 30% + Depreciation charge at 20%.

If the depreciation end date is earlier or equal to the fiscal year end date, the fiscal year charge will automatically be loaded with the net depreciable value, so as to close the depreciation.

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. This distribution is applied according to the following rule:

Period Charge (pc) = 
Fiscal year charge *

[ S p1 to pc ( (Period weight / Number of months in the period) * Number of holding months in the period )

/

[ S p1 to pf ( (Period weight / Number of months in the period) * Number of holding months 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

(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

Examples

1st example 
  •  Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 04/07/2005
  • Depreciation end date: 6/30/2008
     

Fiscal year

Net depreciable value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 2,500.00

2,500.00

1/1/2006 – 31/12/2006

7,500.00

(2) 4,000.00

6,500.00

01/01/2007 – 31/12/2007

3,500.00

(3) 2,500.00 

9,000.00

01/01/2008 – 31/12/2008

1,000.00

(4) 1,000.00 

10,000.00

(1) 10,000.00 * 50% * 6/12

(2) (10,000.00 * 50% * 6/12) + (10,000.00 * 30% * 6/12)

(3) (10,000.00 * 30% * 6/12) + (10,000.00 * 20% * 6/12)

(4) equal to the net depreciable value since the depreciation end date is earlier than the fiscal year end date

Distribution of the 2006 fiscal year charge based on the weight of the periods:

Period

Number of months / Weight

Number of holding months

Fiscal

01/01/2006 – 31/03/2006

03 / 03

03

(5) 1,090.91

01/04/2006 – 30/06/2006

03 / 03

03

(6) 1,090.91

01/07/2006 – 30/09/2006

03 / 02

03

(7) 727.27

01/10/2006 – 31/12/2006

03 / 03

03

(8) 1,090.91

Fiscal year 2006 total

4,000.00

(5)  4,000.00 * (03 / 03 * 03) / [ (03 / 03 * 03) + (03 / 03 * 03) + (02 / 03 * 03) + (03 / 03 * 03) ] = 1,090.91

(6)  4,000.00 * [ (03 / 03 * 03) + (03 / 03 * 03) ] 

/ [ (03 / 03 * 03) + (03 / 03 * 03) + (02 / 03 * 03) + (03 / 03 * 03) ] = 2,181.82 – 1,090.91 = 1,090.91

(7)  4,000.00 * [ (03 / 03 * 03) + (03 / 03 * 03) + (02 / 03 * 03) ] 

/ [ (03 / 03 * 03) + (03 / 03 * 03) + (02 / 03 * 03) + (03 / 03 * 03) ] = 2,909.09 – 2,181.82 = 727.27
(8) 4,000.00 * [ (03 / 03 * 03) + (03 / 03 * 03) + (02 / 03 * 03) + (03 / 03 * 03) ]

/ [ (03 / 03 * 03) + (03 / 03 * 03) + (02 / 03 * 03) + (03 / 03 * 03) ] = 4,000.00 – 2,909.09 = 1,090.91

2nd example
 
  • Gross value: 10,000
  • Residual value: 0
  • Depreciation start date: 04/02/2005
  • Depreciation end date: 1/31/2008
  • Specificity: the 2nd fiscal year has a duration of 18 months, from 01/01/2006 to 30/06/2007

Fiscal year

Net depreciable value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 4,583.33

4,583.33

01/01/2006 – 30/06/2007

5,416.67

(2) 4,250.00

8,833.33

7/1/2007 – 6/30/2008

1,166.67

(3) 1,166.67 

10,000.00

(1) 10,000.00 * 50% * 11/12

(2) (10,000.00 * 50% * 1/12) + (10,000.00 * 30% * 12/12) + (10,000.00 * 20% * 5/12)

(3) equal to the net depreciable value since the depreciation end date is earlier than the fiscal year end date

Case where this asset is issued on 05/04/2007 (the charge will be calculated until 31/03/2007):

Fiscal year

Net depreciable value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(5) 4,583.33

4,583.33

1/1/2006 – 6/30/2007

5,416.67

(6) 3,750.00

8,333.33

 (5) 10,000.00 * 50% * 11/12

(6) (10,000.00 * 50% * 1/12) + (10,000.00 * 30% * 12/12) + (10,000.00 * 20% * 2/12)

LG - Laundry

This typically French depreciation method is specific to laundry used in a professional and/or industrial context, such as roller-towels in companies for instance.

Depreciation origin

It is systematically equal to the 1st day of the month specified as depreciation start date.

Duration

The duration systematically and necessarily equals 18 months (1.5 years).

Rate

The rate can neither be enter, nor determined by section associations. It is automatically determined by Sage X3.  
The rate changes over time:

  • 40% during the 1st month 
  • 12% during the 2nd month
  • 3% per month, from the 3rd to the 18th month

Depreciation end date

It is systematically determined by the application. It is equal to:

1st day of the month entered as Depreciation start date + 18 months

Examples:

Start date

End date

9/15/2005

2/28/2007

2/7/2005

7/31/2006

Prorata temporis

The prorata temporis is systematically expressed in months. It is applied in the following situations:

  • During the acquisition fiscal year, if the depreciation start date is not the first day of the fiscal year.
  • If the fiscal year duration differs from 1 year.
  • During a fiscal year to which several depreciation rates are applied.
  • During the disinvestment fiscal year: the charge is calculated until the disposal day if the day of the disposal date is the last of the month; otherwise, the charge is calculated until the end of the month that precedes the disposal.
    This rule can be modified by Disposal rules: Disposal at the end of the previous FY and Disposal at the end of the current FY.

Depreciation charges

The fiscal year charge is equal to: Depreciation charge at 40% + Depreciation charge at 12% + Depreciation charge at 3%.

If the depreciation end date is earlier or equal to the fiscal year end date, the fiscal year charge will automatically be loaded with the net depreciable value, so as to close the depreciation.

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. This distribution is applied according to the following rule:

Period Charge (pc) = 
Fiscal year charge *

[ S p1 to pc ( (Period weight / Number of months in the period) * Number of holding months in the period )

/

[ S p1 to pf ( (Period weight / Number of months in the period) * Number of holding months 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

(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

Examples

1st example 
  • Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 04/07/2005
  • Depreciation end date: 31/12/2006  

Fiscal year

Net depreciable value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 6,400.00

6,400.00

1/1/2006 – 31/12/2006

3,600.00

(2) 3,600.00

10,000.00

(1)  (10,000.00 * 40% * 1) + (10,000.00 * 12% * 1) + (10,000.00 * 3% * 4)

(2) (10,000.00 * 3% * 12) but depreciation charge = net depreciable value because the depreciation end date is earlier than he fiscal year end date.
 

Distribution of the 2005 fiscal year charge based on the weight of the periods:

Period

Number of months / Weight

Number of holding months

Fiscal

01/01/2005 – 31/03/2005

03 / 03

0

0.00

01/04/2005 – 30/06/2005

03 / 03

0

0.00

7/1/2005 – 9/30/2005

03 / 02

03

(3) 2,560.00

10/1/2005 – 12/30/2005

03 / 03

03

(4) 3,840.00

Fiscal year 2005 total

6,400.00

 (3) 6,400.00 * [ (03 / 03 * 0) + (03 / 03 * 0) + (02 / 03 * 03) ] 

/ [ (03 / 03 * 0) + (03 / 03 * 0) + (02 / 03 * 03) + (03 / 03 * 03) ] = 2,560.00

 (4) 6,400.00 * [ (03 / 03 * 0) + (03 / 03 * 0) + (02 / 03 * 03) + (03 / 03 * 03) ]

/ [ (03 / 03 * 0) + (03 / 03 * 0) + (02 / 03 * 03) + (03 / 03 * 03) ] = 6 400,00 – 2 560,00 = 3,840.00

2nd example 
  • Gross value: 10,000
  • Residual value: 0
  •  Depreciation start date: 2/3/2006
  • Depreciation end date: 7/31/2007
  • Specificity: the 1st fiscal year has a duration of 18 months, from 01/01/2006 to 30/06/2007

Fiscal year

Net depreciable value

Fiscal year charge

Fiscal year total

1/1/2006 – 6/30/2007

10,000.00

(1) 9,700.00

9,700.00

7/1/2007 – 6/30/2008

300.00

(2) 300.00 

10,000.00

(1) (10,000.00 * 40% * 1) + (10,000.00 * 12% * 1) + (10,000.00 * 3% * 15)

(2) (10,000.00 * 3% * 1) but depreciation charge = net depreciable value because the depreciation end date is earlier than he fiscal year end date.

Case when this asset is issued on 04/05/2007 (the depreciation expenditure will be expressed until 03/31/2007):

Fiscal year

Net depreciable value

Fiscal year charge

Fiscal year total

1/1/2006 – 6/30/2007

10,000.00

(3) 8,800.00

8,800.00

 (3) (10,000.00 * 40% * 1) + (10,000.00 * 12% * 1) + (10,000.00 * 3% * 12)

LP - French straight-line

This depreciation method is recognized neither by the French accounting regulations, nor by the tax authorities.
It can be used for analytical purposes, thus mainly on a free depreciation plan. It is used to have a depreciation charge at one's disposal as long as the asset is used by the company, even if it is completely depreciated.
This method is close to the French straight-line one, the main difference being this perpetual depreciation calculation, as long as the asset has not been reported as issued.

Depreciation origin

The depreciation is calculated starting from the day entered in the depreciation Start date.

Duration

The duration cannot be entered, because this is a perpetual depreciation; thus, no duration is indicated.

Rate

The depreciation rate must be entered, either by entry, or via section associations.

Depreciation end date

The end date is not determined since the specificty of this method is to be a perpetual depreciation.

Prorata temporis

The prorata temporis is systematically expressed in days. It is applied in the following situations:

  • During the acquisition fiscal year, if the depreciation start date is not the first day of the fiscal year.
  • If the fiscal year duration differs from 1 year.
  • During a fiscal year to which several depreciation rates are applied.
  • During the disinvestment fiscal year: the charge is calculated until disposal day.
    This rule can be modified by Disposal rules: Disposal at the end of the previous FY, Disposal at the end of the current FY and No depreciation charge on the disposal day

Depreciation charges

The fiscal year charge is equal to:
Gross value * Depreciation rate * prorata temporis in days

Notes:
- Gross value = Depreciation basis
- Although the depreciation must go on beyond the null net value, the net value is never negative, but limited to 0.

Examples

1st example 
  • Gross value: 10,000
  •  Depreciation start date: 11/5/2005
  • Rate: 20 % 
  • Specificity: the second fiscal year has a duration of 6 months

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

(1) 312.33

312.33

1/1/2006 – 6/30/2006

9,687.67

(2) 991.78

1,304.11

7/1/2006 – 30/06/2007

8,695.89

2,000.00

3,304.11

7/1/2007 – 6/30/2008

6,695.89

2,000.00

5,304.11

7/1/2008 – 6/30/2009

4,695.89

2,000.00

7,304.11

7/1/2009 – 6/30/2010

2,695.89

2,000.00

9,304.11

7/1/2010 – 6/30/2011

695.89

2,000.00

11,304.11

01/07/2011 – 30/06/2012

(3) 0.00

2,000.00

13,304.11

7/1/2012 – 6/30/2013

0.00

2,000.00

15,304.11

(1) 10,000.00 * 20% * 57/365 since the asset is held only for 57 days during this 1st fiscal year.

(2) 10,000.00 * 20% * 181/365 since the duration of this 2nd fiscal year is 6 months = 181 days.

(3) The Net value is limited to 0. it does not become negative.

2nd example 
  • Gross value: 10,000
  •  Depreciation start date: 2/2/2002
  • Rate: 25 % 
  • Specificity: the asset was issued on 30/06/2007

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2002 – 31/12/2002

10,000.00

(1) 2,280.82

2,280.82

1/1/2003 – 12/31/2003

7,719.18

2,500.00

4,780.82

1/1/2004 – 12/31/2004

5,219.18

2,500.00

7,280.82

1/1/2005 – 12/31/2005

2,719.18

2,500.00

9,780.82

1/1/2006 – 31/12/2006

219.18

2,500.00

12,280.82

01/01/2007 – 31/12/2007

0

(2) 1,239.73

13,520.55

 (1) 10,000.00 * 25% * 333/365 since the asset is held only for 333 days during this 1st fiscal year.

(2) 10,000.00 * 25% * 181/365 since the asset is held only for 181 days during this fiscal year.

LV - Straight-line beyond null salvage unit

This depreciation method can only be applied:

  • to an asset whose Holding type is In concession, 
  • only to a plan attached to the Accounting and fiscal depreciation context, except for the Grant schedule.

It can be used to limit the depreciation duration according to the concession end date. Indeed, upon completion of the concession, the grantee will have to give the asset back to the licensor. The depreciation therefore cannot be extended beyond this date.

This method also has the specificity of using for its depreciation basis the asset value (its cost price) minus the amount of allocated subsidy. This means that entering a Residual value is prohibited.

..\FCT\SEEINFO The following actions are not available for a plan depreciated according to this method:
- Impairment
- Revaluation

Depreciation origin

The depreciation starts on the day specified as depreciation start date.

Duration

The duration can be specified by the user (in years and hundredths of years). By default, it is determined as follows:
                                         Concession end date - Depreciation start date. 

For example:
 
- Concession end date: 31/12/10
- Depreciation start date: 7/1/2006

- The calculated depreciation duration will be:
                                 31/12/2010 – 01/07/2006 = 1,645 days / 365 = 4,51 years

..\FCT\SEEINFO The depreciation duration specified by the user is not necessarily the one that will be applied. In fact, if this duration leads to a Depreciation end date that is later than the Concession end date, the depreciation duration applied will be calculated as described above.
 
For example:
 
- Duration specified by the user: 10 years
- Depreciation start date: 7/1/2006
- Concession end date: 31/12/10
- The applied depreciation duration will be: 31/12/2010 – 01/07/2006 = 4,51 years

Nevertheless, the depreciation duration specified by the user is stored; if the concession is extended, this entered duration can ultimately be applied, as long as it does not lead to a Depreciation end date that is later than the Concession end date.
In the example above, if the concession is extended to 31/12/2020, the duration applied will be the one entered by the user (10 years), since it no longer leads to a depreciation end date set later than the concession end date. Indeed: 01/07/2006 + 10 years = 30/06/2016 thus earlier than 31/12/2020

Rate

The rate cannot be entered. It is determined automatically depending on the duration, as follows:
                        1 / duration applied (see above) rounded to 4 decimals.

Depreciation end date

It is systematically determined by the application. It is:

  • either equal to the Depreciation start date + Duration entered by the user.
  • or equal to the Concession end date

See the indications given on the Depreciation duration.

Prorata temporis

The applied prorata temportis is always expressed in days. It is applied in the following situations:

  • During the acquisition fiscal year, if the depreciation start date is not the first day of the fiscal year.
  • If the fiscal year duration differs from 1 year.
  • During the disinvestment fiscal year so as to stop the depreciation on disposal day, unless the disposal rule is 1st asset from the concession sold, for which no prorata temporis will be applied.

    Disposal rule:1st asset from the concession sold: 

    This rule is available only for an asset which meets the following condition:
    - It has at least 1 plan depreciated according to the Caducity/gross value mode with the specific rule Adjustment/Reintegration of depreciation.

    It has the effect of considering that the asset is has not been issued. This has 2 consequences:
    - The disinvestment fiscal year charge is complete: no prorata temporis is applied
    - The depreciation continues in the fiscal years that follow the disinvestment fiscal year, until:
      * the depreciation end date,
      * the user sets the specific rule Caducity abandoned.

Specific rules

For this depreciation method, 2 specific rules are available:

  • Adjustment/Reintegration of depreciation 

    This rule can be specified either upon creation of the asset, or via the action Change method, provided the following conditions are met:
    - the asset did not undergo a fiscal year closure, that is, it does not cumulate prior depreciations
    or
    - If the specific rule is equal to Caducity abandoned, the depreciation total of the previous year is different from 0.
  • Caducity abandoned:

    This rule can be specified only via the action Change method and only if the following condition is met:
    - the specific rule is equal to Adjustment/Reintegration of depreciation and the depreciation total of the previous fiscal year is different from 0.

 It is also possible to switch from rule Adjustment/Reintegration of depreciation plan to No specific rule, as long as the asset has not undergone a fiscal year closure, that is, as long as it does not cumulate prior depreciations.

Depreciation basis

It is systematically determined by the calculation program as follows:

(Receipt value ex-tax + invoiced VAT – collected VAT) – Balance sheet value of the Subsidy plan

 Note:

The Balance sheet value recorded for a plan depreciated according to the Caducity/gross value mode is:

  • equal to the Depreciation basis specified above,
  • systematically updated by the calculation program, in order to take into account any modification of at least one of the following values:

    - Receipt value ex-tax
    - Invoiced VAT 
    -  Invoiced VAT
    - Balance sheet value of Subsidy plan

Depreciation charges

The calculation mode for the depreciation charges depends on whether one of the following rules is applied: Adjustment/Reintegration of depreciation and Caducity abandoned.
Reminder: Rules are selected at asset depreciation plan level. This is done by the user, or can be derived from the application of the sector associations.

  • If the specific rule Adjustment/Reintegration of depreciation is applied, the calculation is carried out as follows:
     
    - Systematic recalculation of prior depreciation total E-1
     
    - Calculation of the fiscal year exceptional charge =
      New prior depreciation total E-1
      –
      Old prior depreciation total E-1
     
    - Calculation of the fiscal year normal charge =
       Depreciation basis * Depreciation rate * Prorata temporis in days
  • If the specific rule Adjustment/Reintegration of depreciation is applied, the calculation is carried out as follows:
     
    -     Fiscal year exceptional charge = prior depreciations E-1 * - 1
    - Fiscal year normal depreciation = 0
  • If no specific rule is applied, the calculation is carried out as follows:
     
    - Calculation of the fiscal year normal charge =
       Depreciation basis * Depreciation rate * Prorata temporis in days

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. This distribution is applied according to the following rule:

Period Charge = 
Fiscal year charge
*
( Σ p1 to pc (Number of holding days in the period )
/
Σ p1 to pf (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

(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

Method change

If the specific rule is Adjustment/Reintegration of depreciation, the management of the depreciation total variance systematically and automatically takes the value: "Non integration of the variance". This is taking into account the nature of this specific rule which consists in systematically recalculating the depreciation total of the prior fiscal year and in recording the variance as exceptional charge.

Examples

1st example 
  •  Gross value: 10,000
  •  Depreciation start date: 7/1/2006
  •  Depreciation duration: 10 years
  • Concession end date: 31/12/10
  • Specificity: Specific rule = Adjustment/Reintegration of depreciation 

Taking these data into account, Sage X3 determines:
 
- Depreciation end date = 31/12/2010 since the depreciation start date 01/07/2006 + 10 years = 30/06/2016, a date which is later than the Concession end date.
- Depreciation duration applied: [01/07/2006 – 31/12/2010] / 365 = 1 645 / 365 = 4,51 years
- Depreciation rate: 1 / 4.51 = 22.17%

Fiscal year

Balance sheet value

Fiscal year charge

Fiscal year total

1/1/2006 – 31/12/2006

10,000.00

(1) 1,117.61

1,117.61

01/01/2007 – 31/12/2007

10,000.00

2,217.00

3,334.61

01/01/2008 – 31/12/2008

10,000.00

2,217.00

5,551.61

01/01/2009 – 31/12/2009

10,000.00

2,217.00

7,768.61

01/01/2010 – 31/12/2010

10,000.00

(2) 2,231.39

10,000.00

(1) 10,000.00 * 22.17% * 184/365 since the asset is held only for 184 days during this 1st fiscal year.

(2) 10,000.00 – 7,768.61 = 2,231.39 since the depreciation end date is set in this fiscal year.
 

2nd example
  •  Gross value: 10,000
  •  Depreciation start date: 7/1/2005
  •  Depreciation duration: 10 years
  • Concession end date: 12/31/2009
  • Specificity 1: Specific rule = Reintegration/Depreciation adjustment
  • Specificity 2: On 01/01/2006, the depreciation basis is adjusted to 9,000.00 following the obtaining of a subsidy of 1,000.00.

 Taking these data into account, Sage X3 determines:

- Depreciation end date = 31/12/2009 since the depreciation start date 01/07/2005 + 10 years = 30/06/2015, a date which is later than the Concession end date.
- Depreciation duration applied: [01/07/2005 – 31/12/2009] / 365 = 1,645 / 365 = 4.51 years
- Depreciation rate: 1 / 4.51 = 22.17%

Fiscal year

Balance sheet value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

1,117.61

1,117.61

1/1/2006 – 31/12/2006

9,000.00

(1) - 111.76 and 1,995.30

3,001.15

01/01/2007 – 31/12/2007

9,000.00

1,995.30

4,996.45

01/01/2008 – 31/12/2008

9,000.00

1,995.30

6,991.75

01/01/2009 – 31/12/2009

9,000.00

(2) 2,008.25

9,000.00

(1) 9,000.00 * 22.17% * (184 / 365) = 1,005.85 – 1,117.61 = - 111.76 of exceptional charge

9,000.00 * 22.17% = 1,995.30 of standard charge

(2) 9,000.00 – 6,991.75 = 2,008.25 since the depreciation end date is set in this fiscal year.

Note

If the fiscal year 2006 is divided into quarters, the fiscal year charges are distributed over these periods:

Fiscal year

Period

Dep. charge (normal)

Dep. charge (exception.)

2006

1/1/2006 – 3/31/2006

(5) 491.99

(1) - 27.56

4/1/2006 – 6/30/2006

(6) 497.46

(2) - 27.86

7/1/2006 – 9/30/2006

(7) 502.93

(3) - 28.17

10/1/2006 – 31/12/2006

(8) 502.92

(4) - 28.17

(1) - 111.76 * (90 / 365) = - 27.56

(2) - 111.76 * (181 / 365) = - 55.42 – (- 27.56) = - 27.86

(3) - 111.76 * (273 / 365) = - 83.59 – (- 55.42) = - 28.17

(4) - 111.76 * (365 / 365) = - 111.76 – (- 83.59) = - 28.17

(5) 1,995.30 * (90 / 365) = 491.99

(6) 1,995.30 * (181 / 365) = 989.45 – 491.99 = 497.46

(7) 1,995.30 * (273 / 365) = 1,492.38 – 989.45 = 502.93

(8) 1,995.30 * (365 / 365) = 1,995.30 – 1,492.38 = 502.92

 
3rd example
  •  Gross value: 10,000
  •  Depreciation start date: 7/1/2005
  •  Depreciation duration: 10 years
  • Concession end date: 12/31/2009
  • Specificity 1: Specific rule = Reintegration/Depreciation adjustment
  • Specificity 2: On 01/01/2006, the concession is extended until 31/12/2020.

Taking these data into account, Sage X3 determines:
 
- Depreciation end date = 31/12/2009 since the depreciation start date 01/07/2005 + 10 years = 30/06/2015, a date which is later than the Concession end date.
- Depreciation duration applied: [01/07/2005 – 31/12/2009] / 365 = 1,645 / 365 = 4.51 years
- Depreciation rate: 1 / 4.51 = 22.17%

Fiscal year

Balance sheet value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

1,117.61

1,117.61

1/1/2006 – 31/12/2006

10,000.00

(1) - 613.50
and 1,000.00

1,504.11

01/01/2007 – 31/12/2007

10,000.00

1,000.00

2,504.11

01/01/2008 – 31/12/2008

10,000.00

1,000.00

3,504.11

01/01/2009 – 31/12/2009

10,000.00

1,000.00

4,504.11

01/01/2010 – 31/12/2010

10,000.00

1,000.00

5,504.11

01/01/2011 – 31/12/2011

10,000.00

1,000.00

6,504.11

1/1/2012 – 12/31/2012

10,000.00

1,000.00

7,504.11

1/1/2013 – 12/31/2013

10,000.00

1,000.00

8,504.11

1/1/2014 – 12/31/2014

10,000.00

1,000.00

9,504.11

1/1/2015 – 12/31/2015

10,000.00

(2) 495.89

10,000.00

(1) 10,000.00 * 10% * (184 / 365) = 504.11 – 1,117.61 = - 613.50 of exceptional charge

10,000.00 * 10% = 1,000.00 of standard charge

(2) 10,000.00 – 9,504.11 = 495.89 since the depreciation end date is set in this fiscal year.

RA - Amorization expense / Net value

This depreciation method can only be applied:

  • to an asset whose Holding type is In concession, 
  • only to a plan attached to the Accounting and fiscal depreciation context, except for the Grant schedule.

It is automatically applied:

  • In case of method change by the user on a plan initially depreciated based on the Amortization expense on gross value method with specific rule No specific rule and having a prior depreciation total (Fiscal year -1).
  • In case of a change in the Depreciation basis for a plan depreciated based on the Amorization expense on gross value method with specific rule No specific rule and having a prior depreciation total (Fiscal year -1).
  • In case of duration change following an update of the Concession end date for a plan initially depreciated based on the Caducity on gross value with specific rule No specific rule and having a prior depreciation total (Fiscal year -1).

This method is used to limit the depreciation duration according to the concession end date. Indeed, upon completion of the concession, the grantee will have to give the asset back to the licensor. The depreciation therefore cannot be extended beyond this date.

This method also has the specificity of using for its depreciation basis the asset value (its cost price) minus the amount of allocated subsidy. This means that entering a Residual value is prohibited.

..\FCT\SEEINFO The following actions are not available for a plan depreciated according to this method:
- Impairment
- Revaluation

Depreciation origin

The depreciation starts on the day specified as depreciation start date.

Duration

The duration can be specified by the user (in years and hundredths of years). By default, it is determined as follows:
                                         Concession end date - Depreciation start date. 

For example:
- Concession end date: 31/12/10
- Depreciation start date: 7/1/2006
- The calculated depreciation duration will be:
                                 31/12/2010 – 01/07/2006 = 1,645 days / 365 = 4,51 years

 ..\FCT\SEEINFO The depreciation duration specified by the user is not necessarily the one that will be applied. In fact, if this duration leads to a Depreciation end date that is later than the Concession end date, the depreciation duration applied will be calculated as described above.
 
For example:
 
- Duration specified by the user: 10 years
- Depreciation start date: 7/1/2006
- Concession end date: 31/12/10
- The applied depreciation duration will be: 31/12/2010 – 01/07/2006 = 4,51 years

Nevertheless, the depreciation duration specified by the user is stored; if the concession is extended, this entered duration can ultimately be applied, as long as it does not lead to a Depreciation end date that is later than the Concession end date.
In the example above, if the concession is extended to 31/12/2020, the duration applied will be the one entered by the user (10 years), since it no longer leads to a depreciation end date set later than the concession end date. Indeed: 01/07/2006 + 10 years = 30/06/2016 thus earlier than 31/12/2020.

Rate

No rate can be entered by the user.

Depreciation end date

It is systematically determined by the application. It is:

  • either equal to the Depreciation start date + Duration entered by the user.
  • or equal to the Concession end date

See the indications given on the Depreciation duration.

Prorata temporis

This depreciation method does not apply a prorata temporis, since the depreciation charge is not determined by application of an annual rate to a depreciation basis.

Depreciation basis

It is systematically determined by the calculation program as follows:

(Receipt value ex-tax + invoiced VAT – collected VAT) – Balance sheet value of the Subsidy plan

 ..\FCT\SEEINFO The Balance sheet value recorded for a plan depreciated according to the Caducity/gross value mode is:

  • equal to the Depreciation basis specified above,
  • systematically updated by the calculation program, in order to take into account any modification of at least one of the following values:

    - Receipt value ex-tax
    - Invoiced VAT 
    -  Invoiced VAT
    - Balance sheet value of Subsidy plan

Depreciation charges

1/ Case where the asset is not issued, and
    Case when the asset has been issued in a period < current period:

  • The charge for the residual fiscal year = [Current period – Last period of the fiscal year] is determined as folllows:
     
    Net value at period start
    *
    Number of holding days in the interval [pc – pf] 
    /
    Number of days in the interval [pc – Depreciation end date]
     
  • The charge of each period not closed is then calculated as follows:
     
    Charge for the residual fiscal year
    *
    (S pc to pn (Number of holding days in the period)
    /
    S pc to pf (Number of holding days in the period) )
    - S depreciations in the periods of the interval [pc – pn-1]  
     
    ( pc = Current period, pn = Calculated period, pf = last holding period of the fiscal year )
     
    Therefore, the complete fiscal year charge will be equal to =
                  ( Depreciation total in closed periods + Charge for the residual fiscal year )

2/ Case when the asset has been issued in a period < current period:

  • Recalculation of the charge in the period of the Disposal date (2): 
    Net value at Disposal period start
    *
    (Number of holding days in the Disposal period
    /
    Number of days in the interval [Disposal period – Depreciation end date] )
     
    (2) This recalculation is used to determine the recovery of depreciations posted by error.
  • Disposal fiscal year charge calculation = S period charge [fiscal year start – Disposal period]
  • Current period charge calculation =

Disposal fiscal year charge - S Closed period charges

Examples

1st example 
  • Gross value: 10,000 in 2005
  •  Depreciation start date: 7/1/2005
  • Duration: 10 years
  • Concession end date: 12/31/2009 
  • Specificity 1: In 2005, the depreciation method was Caducity/gross value
  • Specificity 2: At the start of 2006, updating the Depreciation basis to 9,000 after the obtaining of a subsidy of 1,000 triggers a change to the Caducity/net value method. 

 

Taking these data into account, Sage X3 determines:
- Depreciation end date = 31/12/2009 since the depreciation start date 01/07/2005 + 10 years = 30/06/2015, a date which is later than the Concession end date. 
- Depreciation duration applied: [01/07/2005 – 31/12/2009] / 365 = 1,645 / 365 = 4.51 years
- Depreciation rate: 1 / 4.51 = 22.17%

 

Fiscal year

Net value

Fiscal year charge

Fiscal year total

01/01/2005 – 31/12/2005

10,000.00

1,117.61

1,117.61

1/1/2006 – 31/12/2006

7,882.39

(1) 1,969.25

3,086.86

01/01/2007 – 31/12/2007

5,913.14

1,969.25

5,056.11

01/01/2008 – 31/12/2008

3,943.89

1,974.64

7,030.75

01/01/2009 – 31/12/2009

1,969.25

1,969.25

9,000.00

(1) Net value at the start of 2006: 7,882.39 * (365 / 1461) = 1,969.25

2nd example 
  • Gross value: 10,000 in 2005
  •  Depreciation start date: 1/1/2005
  • Duration: 10 years
  • Current period: [01/04/2006 - 30/06/2006]
  • Concession end date: 12/31/2009 
  • Specificity 1: In 2005, the depreciation method was Caducity/gross value
  • Specificity 2: On 01/06/2006, updating the Depreciation basis to 9,000 after the obtaining of a subsidy of 1,000 triggers a change to the Caducity/net value method. 

 

Taking these data into account, Sage X3 determines:
- Depreciation end date = 31/12/2009 since the depreciation start date 01/01/2005 + 10 years = 30/06/2015, a date which is later than the Concession end date. 
- Depreciation duration applied: [01/01/2005 – 31/12/2009] / 365 = 1,826 / 365 = 5 years
- Depreciation rate: 1 / 5 = 20 %
 

Fiscal year

Period

Net value

Fiscal

Total

2005

1/1/2005 – 12/31/2005

10,000.00

2,000.00

2,000.00

2006

1/1/2006 – 3/31/2006

8,000.00

(1) 493.15

2,493.15

4/1/2006 – 6/30/2006

(2) 6,506.85

(3)  431.89

2,925.04

7/1/2006 – 9/30/2006

6,074.96

(4) 436.64

3,361.68

10/1/2006 – 31/12/2006

5,638.32

(5) 436.64

3,798.32

2007

1/1/2007 – 3/31/2007

5,201.68

(6) 427.14

4,225.46

4/1/2007 – 6/30/2007

4,774.54

(7) 431.90

4,657.36

7/1/2007 – 9/30/2007

4,342.64

(8) 436.63

5,093.99

10/1/2007 – 31/12/2007

3,906.01

(9) 436.64

5,530.63

2008

01/01/2008 – 31/12/2008

3,469.37

1,737.06

7,267.69

2009

01/01/2009 – 31/12/2009

1,732.31

1,732.31

9,000.00

 

(1) 10,000.00 * 20% * (90 / 365) = 493.15

(2) Net value on 01/04/2006 = 9,000.00 – 2,493.15 = 6,506.85

(3) 6,506.85 * (275 / 1,371) = 1,305.17 * (91 / 275) = 431.89

(4) 6,506.85 * (275 / 1,371) = 1,305.17 * (183 / 275) = 868.53 – 431.89 = 436.64

(5) 6,506.85 * (275 / 1,371) = 1,305.17 * (275 / 275) = 1,305.17 – 868.53 = 436.64

(6) 5,201.68 * (365 / 1,096) = 1,732.31 * (90 / 365) = 427.14

(7) 5,201.68 * (365 / 1,096) = 1,732.31 * (181 / 365) = 859.04 – 427.14 = 431.90

(8) 5,201.68 * (365 / 1,096) = 1,732.31 * (273 / 365) = 1,295.67 – 859.04 = 436.63

(9) 5,201.68 * (365 / 1,096) = 1,732.31 56 * (365 / 365) = 1,732.31 – 1,295.67 = 436.64