Turkish 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 Turkish legislation.

• TL - Turkish Linear
• TD - Turkish declining

TL - Turkish Linear

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

It is the linear depreciation method applied according to Turkish rules.

Depreciation starting point

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

Duration

You can specify either the duration, or the rate.

If you specify the duration, 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

You can specify the rate.

In this case, Sage X3 determines the depreciation duration based on the rate entered. This determined duration is used to calculate the depreciation end date.

When you do not specify the depreciation rate, Sage X3 determines it as follows: 1 / duration.

Depreciation end date

The end date depends on whether the 1st fiscal year counted for 1 year specific rule is applied or not.

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

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

Start date	Duration	End date
01/01/2005	3 years and ½ year	30/06/2008
14/10/2005	3.25 years and ½ year	30/09/2008
01/01/2005	5.33 and month	30/04/2010
01/01/2005	3 and ½ month	15/01/2008
08/11/2005	3.25 and ½ month	15/02/2009
01/01/2005	3 and ½ quarter	15/02/2008
08/12/2005	3 and ½ quarter	15/11/2008

Prorata temporis

Time is expressed in months or days depending on what you select at the depreciation plan level.

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 affects the determination of the Depreciation end date.

Depreciation charge

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 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 first holding period in the fiscal year to the current period included (1)

p1 to pf = from the first 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 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

TD - Turkish declining

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

This declining depreciation method is used in Türkiye.

Depreciation starting point

This depends on the prorata temporis type you defined at the depreciation plan level:

• If prorata = Month (Month): Depreciation start on the first day of the month the depreciation starts on. (1)
• If prorata = ½ Month (Mid-Month): Depreciation start on the middle of the month the depreciation starts on.
• If prorata = ½ quarter (Mid-Quarter): Depreciation start on the middle of the quarter the depreciation starts on. (3)
• If prorata = ½ year (Half-Year): ½ annuity is applied to the year of acquisition (4)

(1) Irrespective of the day of the depreciation start date.

(2) Irrespective of the day of the depreciation start date, even if it is the first day of the month.

(3) Irrespective of the day of the depreciation start date, even if it is the first day of the quarter.

(4) Irrespective of the day of the depreciation start date and regardless of the duration of the fiscal year.

Duration

The duration is expressed in years and hundredths of years.

Examples:

• 5 for 5 years
• 3.5 for 3 years and 6 months
• 6.66 for 6 years and 8 months

Rate

You cannot enter the depreciation rate. It is calculated automatically, as follows, according to an acceleration coefficient: ( 1 / duration) * acceleration coefficient.

You can enter this acceleration coefficient or it can be defined by associations, especially if this method is also defined by associations. It can be modified by the Method change action.

It corresponds to the declining coefficient applied to the Turkish declining depreciation method. It can take the following values:

• 1.25
• 1.50
• 1.75
• 2

Depreciation end date

It depends on the prorata temporis type:

If prorata temporis = ½ year:

Depreciation end date = first day of the month corresponding to the start date of the fiscal year following the acquisition year. + (Depreciation duration - 0.5)

This leads to a last day of the month.

If prorata temporis = month:

Depreciation end date = first day of the month of the depreciation start date + depreciation duration

This leads to a last day of a month.

If prorata temporis = ½ month:

Depreciation end date = first day of the month of the depreciation start date + Depreciation duration + 0.5 month

This leads to the 15th of the month.

If prorata temporis = ½ quarter:

Depreciation end date = first day of the quarter of the depreciation start date + Depreciation duration + 0.5 quarter

This leads to a mid-quarter.

Calculation examples of depreciation end date:

Start date	Duration	End date
01/01/2005	3 years and ½ year	30/06/2008
14/10/2005	3.25 years and ½ year	30/09/2008
01/01/2005	5.33 and month	30/04/2010
01/01/2005	3 and ½ month	15/01/2008
08/11/2005	3.25 and ½ month	15/02/2009
01/01/2005	3 and ½ quarter	15/02/2008
08/12/2005	3 and ½ quarter	15/11/2008

Prorata temporis

You can specify the prorata temporis type or it must be defined by associations when the depreciation method is also defined by associations. It can be modified by the Method change action.

The possible values are the following:

• Prorata = month (Month)
• Prorata = ½ month (Mid-Month)
• Prorata = ½ quarter (Mid-Quarter)
• Prorata = ½ year (Half-Year)

Depreciation charge

The charge is equal to the higher of the 2 following values:

• Net depreciable value * Depreciation rate * prorata temporis
• Net depreciable value * (Holding duration in fiscal year / Residual depreciation duration)

It is important to note that:

Net depreciable value = (Net value – Residual value)

Residual depreciation duration = duration of the period [fiscal year start date - depreciation end date]

If the Depreciation end date is = to the Fiscal year end date and if the asset is not disposed of before this depreciation end date, then the Fiscal year charge = Net depreciable value. If the Net depreciable value is greater than 0, and the residual depreciation duration is equal to 0, such as when depreciation end date < fiscal year start date, then the Fiscal year charge = Net depreciable value in order to close the depreciation.

The charge of the disinvestment fiscal year is calculated depending on the type of prorata temporis:

• If Prorata = ½ year, the disinvestment fiscal year charge corresponds to the fiscal year charge * 50%. This is also the case when the asset is disposed of during the depreciation end fiscal year. The same applies to a disinvestment fiscal year different from 12 months.
• If Prorata = month, the depreciation is calculated until the end of the month prior to the disposal month, or until the disposal day when it is the last day of the month.
• If Prorata = ½ month, the charge is calculated until the middle of the disposal month: ½ a charge is kept for the disposal month.
• If Prorata = ½ quarter, the disinvestment fiscal year charge corresponds to the fiscal year charge * a percentage varying according to the fiscal year disposal quarter:
  12.50% (1 ½ quarter/ 8) if the Disposal date is in the first quarter
  37.50% (3 ½ quarter/ 8) if the Disposal date is in the second quarter
  62.50% (5 ½ quarter/ 8) if the Disposal date is in the third quarter
  87.50% (7 ½ quarter/ 8) if the Disposal date is in the fourth quarter

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.

Distribution of the fiscal year charge on 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:

Prorata temporis = ½ year or month

In this case, the holding period starts on the first day of the month the depreciation starts on.

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

Prorata temporis 2 = ½ month or ½ quarter

In this case, the holding period starts:

• Either on the middle of the month on which the depreciation starts, if Prorata = ½ month.
• Or on the middle of the quarter on which the depreciation starts, for example the middle of the second month of the quarter, if Prorata = ½ quarter.

Period charge = fiscal year charge * ( Σ p1 to pc (Number of holding months in the period ) / Σ p1 to pf (Number of holding months in the period) - Depreciation total of previous periods

p1 to pc = from the first holding period in the fiscal year to the current period included (1)

p1 to pf = from the first 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