Swiss standard depreciation method description

HL - Swiss straight-line

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

Depreciation origin

The effective depreciation calculation start date depends on whether the specific rule "1st FY calculated for 1yr" is applied and on the type of prorata applied:

• The rule is applied and the prorata is in days or months: Sage X3 takes the start date of the fiscal year in which the depreciation start date entered is included.
• The rule is not applied and the prorata is in days: Sage X3 takes the day specified in the depreciation start date entered.
• The rule is not applied and the prorata is in months: Sage X3 takes the first day of the month specified in the depreciation start date entered.

Duration

The duration is mandatory. The duration is expressed in years and thousandths of years.
Example: 6,666 or 6,667 for a duration of 6 years 2/3.

 Notes:

• The Duration in months right click option, available in the Duration field, makes it possible to enter the duration directly in months. This duration is then automatically converted into years and year thousandths.

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 end date depends:

• on whether this Specific rule is applied:1st fiscal year counted for 1 year.
• on the selected prorata type:Days or Months.
  

Depreciation end date calculation example:

• Depreciation start date:3/15/2013
• Duration:3 years

Implementation Specific rule	Prorata in Days	Prorata in Months
YES	12/31/2015	12/31/2015
NO	3/14/2016	2/29/2016

Prorata temporis

Time is expressed in months or days depending on what the user selects.

A prorata temporis is applied in the following cases:

• 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 in order to determine the depreciation end date.

Specific rules

For this depreciation method, 1 specific rule is available:

• 1st fiscal year counted for 1 year.
  This rule intervenes on the determination of the depreciation end date and in the depreciation charge calculation.

This rule, specified at asset depreciation schedule level, is set by the user or comes from the application of section associations.

Depreciation charges

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

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 [depending on the prorata type (days or months)]:

Period Charge (pc) = 
Fiscal year charge *

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

• Gross value: 300,000
• Depreciation start date entered: 3/15/2013
• Depreciation duration: 3 years

1st example:

• Specific rule: 1st fiscal year counted for 1 year= YES
• Prorata in days or months
• Effective depreciation start date:1/1/2013
• Depreciation end date:12/31/2015
   
  

  Holding duration in months	Fiscal year	Charge	Total
  10	2013	100,000.00	100,000.00
  12	2014	100,000.00	200,000.00
  12	2015	100,000.00	300,000.00
  2	2016	----	300,000.00

2nd example:

• Specific rule: 1st fiscal year counted for 1 year= NO
• Prorata in days
• Effective depreciation start date:3/15/2013
• Depreciation end date:3/14/2016
   
  

  Fiscal year

  Holding duration in days

  Number of days in the year

    

  Charge

    

  Total

   2013

  292

   365

   80,000.00

    80,000.00

   2014

  365

   365

  100,000.00

   180,000.00

   2015

  365

   365

  100,000.00

   280,000.00

   2016

  74

   366

     20,000.00

   300,000.00

3rd example:

• Specific rule:1st fiscal year counted for 1 year= NO
• Prorata in months

Effective depreciation start date:3/1/2013

Depreciation end date:2/29/2016
 

Fiscal year	Holding duration in months	Number of months in the year	Charge	Total
2013	10	12	88,333.33	88,333.33
2014	12	12	100,000.00	188,333.33
2015	12	12	100,000.00	288,333.33
2016	2	12	16,667.67	300,000.00

HD - Swiss declining

It is the declining depreciation method applied according to Swiss 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 duration is determined from the rate.

Rate

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

Depreciation end date

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

In the case of a "constant" declining depreciation without switching to straight-line mode, as a general rule the depreciation is not closed. Consequently, the net value of the asset may be different from zero.
To avoid this situation, it is possible to indicate in the parameterNETVALWRO - Minimum net value, (chapter AAS, group CLC), the value below which the NV must be closed.

Prorata temporis

Time is expressed in months or days depending on what the user selects.

A prorata temporis is applied in the following cases:

• 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 in order to determine the depreciation end date.

Specific rules

For this depreciation method, 1 specific rule is available:

• 1st fiscal year counted for 1 year.
  This rule intervenes on the determination of the depreciation end date and in the depreciation charge calculation.

This rule, specified at asset depreciation schedule level, is set by the user or comes from the application of section associations.

Depreciation charges

• The depreciation charge of the 1st fiscal year is equal to:
     Depreciable value * rate * prorata temporis (in holding days or months, according to the setup)
   
  A Prorata temporis is applied in the following cases:
   
  - The Depreciation start date is later than the fiscal year start date
  - The fiscal year duration is not complete
  - 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 at fiscal year start * rate * prorata temporis
   
  A Prorata temporis is applied in the following cases:
   
  - The fiscal year duration is not complete
  - The Disposal date of the asset is in the interval [Fiscal year start date – Fiscal year end date] 
  
  When the net value of the asset becomes equal to the value specified in the parameter NETVALWRO - Minimum net value, the depreciation is closed: the charge corresponds to the asset net value.

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 or months in the periods, depending on the prorata type.
The number of days/months specified in the Depreciation context setup is taken into account in the depreciation charge calculation.

Examples

• Gross value: 300,000.
• Depreciation start date entered: 3/15/2013
• Depreciation rate:
• Parameter NETVALWRO - Minimum net value = 100

1st example:

• Specific rule: 1st fiscal year counted for 1 year= YES
• Prorata in months
• Effective depreciation start date:1/1/2013  
  

  Holding duration in months	Fiscal year	Charge	Total	Net value
  12	2013	100,000.00	100,000.00	200,000.00.
  12	2014	66,666.67	166,666.67	133,333.33.
  12	2015	44,444.44	211,111.11	88,888.89.
  12	2016	29,629.63	240,740.74	59,259.26.
  12.	2017.	19,753.09.	260,493.83.	39,506.17.
  ...	...	....	....	....
  12.	2031.	67.66.	299,864.67.	135.33.
  12.	2032.	45.11.	299,909.78.	90.22.
  	2033.	90.22.	300,000.00.	---

2nd example:

• Specific rule:1st fiscal year counted for 1 year= NO
• Prorata in days
• Effective depreciation start date:3/15/2013

  Fiscal year	Holding duration in days	Number of days in the year	Charge	Total	Net value
  2013	292	365	80,000.00	80,000.00	220,000.00.
  2014	365	365	73,333.33	153,333.33	146,666.67.
  2015	365	365	48,888.89	202,222.22	97,777.78.
  2016	366	366	32,592.59	234,814.81	65,185.19.
  2017.	365.	365.	21,728.40.	265,543.21.	43,456.79.
  ...	...	...	...	...	...
  2031.	365.	365.	74.43.	299,851.14.	148.86.
  2032.	366.	366.	49.62.	299,900.76.	99.24.
  2033.	365.	365.	99.24.	300,000.00.	---

3rd example:

• Specific rule:1st fiscal year counted for 1 year= NO
• Prorata in months
• Effective depreciation start date:3/1/2013
   
  

Fiscal year

 

Holding duration
in months

Number
of days
in the year 

Charge 

Total        

Net value   

 2013

10

12

83,333.33

 83 333,33

 216,666.67

2014

12

12

 72 222,22

155,555.55

 144,444.45

2015

12

12

 48 148,15

203,703.70

  96,296.30

2016

12

12

 32 098,77

235,802.47

  64,197.53

2017

12

12

  21,399.18

 257,201.65

 42,798.35

...

...

...

...

...

 ...

 2031

12

12

      73.30

299,853.39

    146.61

2032

12

12

     48.87

299,902.26

      97.74

2033

 12

12

     97.74

300,000.00

 ---