German 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 German legislation.

• DA - German declining
• DX - German mixed declining

DA - German declining

• Depreciation origin
• Duration
• Rate
• Depreciation end date
• Prorata temporis
• Depreciation charges

This is a declining depreciation method that differs from the German mixed declining method because the depreciation rate is systematically applied as long as the depreciation end date is not reached: the depreciation is closed as soon as the depreciation end date is detected.

Depreciation origin

The origin depends on the prorata temporis:

If the prorata temporis is expressed in months:

The declining depreciation origin is the 1st day of the month entered in the depreciation start date.

If the prorata temporis is expressed in weeks:

The declining depreciation origin is the 1st day of the 1st week of the month entered in the depreciation start date.

If the depreciation method defined at setup is retained, the depreciation start date will automatically be loaded with the 1st day of the acquisition quarter: the depreciation will thus be determined from this date on.

Duration

You need to enter the duration in years and hundredths of years. For example: 6 years 2/3 = 6.66 or 6.67.

All the durations entered or imported with more than 2 decimal places are rounded to 2 decimal places. The same applies to residual durations calculated in the framework of intra-group sales.

Rate

The rate that can be applied for the declining depreciation calculation cannot be determined by section associations, it is automatically determined as follows:

Decrease of both values: (1 / depreciation duration * depreciation factor) and maximum rate

The depreciation factor and depreciation rate maximum are defined as follows:

Purchase period	Coefficient	Maximum rate
Until 12/31/2000	3	30%
01/01/2001 - 31/12/2005	2	20%
01/01/2006 - 31/12/2007	3	30%
01/01/2008 - 31/12/2008	1
01/01/2009 - 31/12/2010	2.5	25%
From 01/01/2011 and after	1
01/01/2020 - 31/12/2022	2.25	25%
01/04/2024 - 31/12/2024	2	20%

Depreciation end date

It depends on the prorata temporis type.

If the prorata temporis is expressed in months:

Depreciation end date = 1st day of the month of the depreciation start date + depreciation duration in months.

This leads to a depreciation end set at the end of the month.

Example 1

Depreciation start date: 05/12/2005

Duration: 3 years

Depreciation end date: 30/11/2008

Example 2

Depreciation start date: 01/07/2005

Duration: 5 years

Depreciation end date: 30/06/2010

If the prorata temporis is expressed in weeks:

Depreciation end date = 1st day of the 1st week of the month of the depreciation start date + depreciation duration in months.

This leads to a depreciation end set at the end of a week.

Example 3

Depreciation start date: 15/09/2005 (the 1st day of the 1st week in 09/05 is 05/09/2005)

Duration: 5 years

Depreciation end date: 29/08/2010

Prorata temporis

The time is expressed in months or weeks if the Prorata temporis in weeks field is selected at depreciation context level.

A prorata temporis is applied in the following cases:

• During the acquisition fiscal year, if the depreciation origin is not the 1st day of the fiscal year.
• If a fiscal year has a duration different from 12 months or 52 weeks in the case of prorata temporis in weeks.
• During the disinvestment fiscal year, the charge is calculated until the last day of the month entered in the disposal date (or until the last day of the last week). 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 charge for the fiscal years, except for the last one, is equal to: Net depreciable value * rate * prorata temporis

A prorata temporis in months or in days is applied in the following cases:

• The depreciation start date is after the fiscal year start date
• The duration of the fiscal year differs from 12 months (or 52 weeks in the case of prorata temporis in weeks)
• The disposal date of the asset is in the interval [Fiscal year start date – Fiscal year end date]
• The depreciation charge of the fiscal year containing the depreciation end date is equal to: Net depreciable value at fiscal year start * prorata temporis
• If the depreciation end date is earlier than the fiscal year end date, the fiscal year charge will automatically be loaded with the net depreciable value to close the depreciation.

A prorata temporis in months or in weeks is applied in the following cases:

• The disposal date of the asset is within the [Fiscal year start date – Fiscal year end date]
• The disposal date is earlier than the depreciation end date

Notes

• Depreciable value = Gross value – Residual value
• Net depreciable value = Net value – Residual value

DX - German mixed declining

• Depreciation origin
• Duration
• Rate
• Depreciation end date
• Prorata temporis
• Depreciation charges
• Distribution of the fiscal year charge on the periods

Depreciation origin

The origin depends on the prorata temporis:

• If the prorata temporis is expressed in months:
  The declining depreciation origin is the 1st day of the month entered in the depreciation start date.
• If the prorata temporis is expressed in weeks:
  The declining depreciation origin is the 1st day of the 1st week of the month entered in the depreciation start date.

If the Simplification rule, specified when setting up the depreciation method setup is retained, the depreciation start date defaults to the first day of the acquisition quarter. The depreciation is determined from this date on.

Duration

You need to enter the duration in years and hundredths of years.

For example: 6 years 2/3 = 6.66 or 6.67

For this depreciation method, all the durations entered or imported with more than 2 decimal places is rounded to 2 decimal places. The same applies to residual durations calculated in the framework of intra-group sales.

Rate

The rate that can be applied for the declining depreciation calculation cannot be determined by section associations, it is automatically determined as follows:

Decrease of both values: (1 / depreciation duration * depreciation factor) and maximum rate

The depreciation factor and depreciation rate maximum are defined as follows:

Purchase period	Coefficient	Maximum rate
Until 31/12/2000	3	30%
01/01/2001 - 31/12/2005	2	20%
01/01/2006 - 31/12/2007		30 %
01/01/2008 - 31/12/2008	1
01/01/2009 - 31/12/2010	2.5	25 %
From 01/01/2011 onwards	1

Depreciation end date

It depends on the prorata temporis type.

If the prorata temporis is expressed in months:

Depreciation end date = 1st day of the month of the depreciation start date + depreciation duration in months.

This leads to a depreciation end set at the end of the month.

Example 1

Depreciation start date: 05/12/2005

Duration: 3 years

Depreciation end date: 11/30/2008

Example 2

Depreciation start date: 01/07/2005

Duration: 5 years

Depreciation end date: 30/06/2010

If the prorata temporis is expressed in weeks:

Depreciation end date = 1st day of the 1st week of the month of the depreciation start date + depreciation duration in months.

This leads to a depreciation end set at the end of a week.

Example 3

Depreciation start date: 15/09/2005 (the first day of the 1st week in 09/05 is 05/09/2005)

Duration: 5 years

Depreciation end date: 29/08/2010

Prorata temporis

Is active at the level of the context of depreciation.

A prorata temporis applies in the following cases:

• During the acquisition fiscal year, if the depreciation origin is not the 1st day of the fiscal year.
• If a fiscal year has a duration different from 12 months, or 52 weeks with a prorata temporis in weeks.
• During the disinvestment fiscal year, the charge is calculated until the last day of the month entered in the disposal date. Or until the last day of the last week of the month entered in the disposal date if the Prorata temporis in weeks option is selected. This rule can be modified by the 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

A prorata temporis in months or in weeks is applied in the following cases:

• The depreciation start date is later than the fiscal year start date
• The duration of the fiscal year differs from 12 months (or 52 weeks in the case of prorata temporis in weeks)
• The disposal date of the asset within [Fiscal year start date – Fiscal year end date]

The depreciation charge of the next fiscal years is equal to:

• Either the Net depreciable value at fiscal year start * rate * prorata temporis
• Or the Net depreciable value at fiscal year start * ( number of holding months or weeks in the fiscal year
  / number of months or weeks in the period [Fiscal year start date – Depreciation end date] )

If the result of this calculation is larger than: Net depreciable value at fiscal year start * rate * prorata temporis

A prorata temporis in months or in weeks is applied in the following cases:

• The duration of the fiscal year differs from 12 months (or 52 weeks in the case of prorata temporis in weeks)
• 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 or equal to the fiscal year end date, the fiscal year charge is automatically loaded with the net depreciable value, so as to close the depreciation.

• Depreciable value = Gross value – Residual value
• Net depreciable value = Net value – Residual value

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 =
( Σ p1 to pc ( (Period weight / Number of months or weeks in the period) * Number of holding months or weeks in the period )
/
Σ p1 to pc ( (Period weight / Number of months or weeks in the period) * Number of holding months or weeks 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 minimum period is retained retained if it is one of the following:

• The period of depreciation end if the Depreciation end date belongs to the interval [period start – period end]
• The disposal period if the Disposal date belongs to the interval [period start – period end]
• The current period