Swiss 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 p1 to pc associated with the Swiss legislation.

• HL - Swiss straight-line
• HD - Swiss declining

HL - Swiss straight-line

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

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 1 year 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

The Duration in months right-click option, available in the Duration field, allows you to enter the duration directly in months. This duration is then automatically converted into years and year thousandths.

Rate

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

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

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 you select.

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.

You can set this rule, specified at the asset depreciation schedule level, or it can come 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

p1 to pf = from the 1st holding period in the fiscal year to the last holding period in the fiscal year

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 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

HD - Swiss declining

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

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. Because of this, 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 by section associations.

Depreciation end date

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

Prorata temporis

Time is expressed in months or days depending on what you select.

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.

You can set this rule, specified at the asset depreciation schedule level, or it can come from the application of section associations.

Depreciation charges

The depreciation charge of the first 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 NETVALWRO - Minimum net value parameter (chapter AAS, group CLC), the depreciation is closed and 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 considered in the depreciation charge calculation.