Depreciation Groups

Assets – Depreciation Groups
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When depreciating assets, you are required by law to assign them to the appropriate depreciation group. The Depreciation Groups form contains strictly predefined groups in accordance with the Income Tax Act, and also allows you to create new ones. This table is used to define tax depreciation rates for asset depreciation.

This form is linked to the Depreciation tab in the Assets – Assets menu.

General information about code lists can be found in the Code Lists chapter.

You can open the list in the "Assets" module under the "Depreciation Groups" option.

The top toolbar contains a number of buttons whose functions are described in the "Program Controls" chapter.

Main panel
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Press the "New" button or use the keyboard shortcut Alt+N to open the form for a new record.

The top toolbar of the form contains a number of buttons whose functions are described in the "Program Controls" chapter.

Abbreviation

Required field, may contain up to 20 characters. The value must be unique among all records.

The abbreviation (also referred to as a code) is a shortened representation of the group.

We recommend choosing an abbreviation that reflects the characteristics of the group, so you can immediately understand what the group represents.

Name

Required field, may contain up to 255 characters.

This generally represents the record in overviews, print reports, and selection lists, so it should describe the record in a unique and clear way.

If you configured foreign languages during the initial setup, pressing the "+" button allows you to fill in the "Name" field in the selected foreign languages. These language variants of the name are printed on documents when printing in a foreign language. Press the "-" button to close the foreign language name fields.

Depreciation Method

This field is required. It corresponds to the depreciation method defined by the Income Tax Act. Use the drop-down list to select from the following values:

· Straight-line – pursuant to § 31 of the Income Tax Act

· Accelerated – pursuant to § 32 of the Income Tax Act

· Monthly – pursuant to § 30a) – Extraordinary depreciation, 32a) – Depreciation of intangible assets of the Income Tax Act. This depreciation method can also be used if you require monthly depreciation, for example for minor assets.

Created by User

"Coefficients" tab
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Asset depreciation is calculated based on the settings in this tab.

Depreciation Period

For accelerated and straight-line depreciation, the value is expressed in years.

For monthly depreciation, the value is expressed in months.

Minimum Depreciation Period

For monthly depreciation – this value defines the minimum depreciation period following a technical improvement. This period is defined by the Income Tax Act – pursuant to § 30.

Accelerated Depreciation

These fields are available when the depreciation method is set to "Accelerated". The calculation method corresponds to the method defined in § 32 of the Income Tax Act.

· First year – coefficient for accelerated depreciation in the 1st year of depreciation

· Subsequent years – coefficient for accelerated depreciation in subsequent years of depreciation

· Increased acquisition cost – accelerated depreciation coefficient applicable to the increased residual value in the case of a technical improvement

For reference, here is the principle behind the accelerated depreciation calculation:

· First year = acquisition cost / coefficient for the first year

· Subsequent years = 2 × residual value / coefficient for subsequent years minus the difference between the assigned coefficient and the number of years the asset has already been depreciated

· After technical improvement = 2 × residual value / accelerated depreciation coefficient applicable to the increased residual value minus the difference between the assigned coefficient and the number of years depreciated from the increased residual value

Straight-line Depreciation

These fields are available when the depreciation method is set to "Straight-line". The calculation method corresponds to the method defined in § 31 of the Income Tax Act.

· First year – annual depreciation rate for the 1st year of depreciation

· Subsequent years – annual depreciation rate for subsequent years of depreciation

· Increased acquisition cost – annual depreciation rate applicable to the increased acquisition cost in the case of a technical improvement

For reference, here is the principle behind the straight-line depreciation calculation:

· First year = acquisition cost × percentage for the first year / 100

· Subsequent years = acquisition cost × percentage for subsequent years / 100

· After technical improvement = (acquisition cost + technical improvement) × percentage for technical improvement / 100

"Texts" tab
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The "Texts" tab is present in all code lists and all record lists. It contains two fields where you can enter information according to your own needs. Filling in these fields is not required. This tab can be filled in even when the preceding tab is not editable.

Description

You can enter a more detailed description here.

Note

The note is used to alert users to any special characteristics of the record, or to highlight anything other users should be aware of when working with the record.

"Administration" tab
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The "Administration" tab contains information about the time validity and visibility of a given record in the code list. The validity of a record is defined by a range of calendar years. Within the specified range of years the record is valid; outside that range it is not active and will not appear in the code list at all. By restricting validity, you ensure that users are not slowed down by scrolling through obsolete records during routine use of the code list.

Because time validity is tied to calendar years, it does not correspond to fiscal accounting periods.

Valid from

The calendar year from which the record becomes valid.

Valid to

The calendar year in which the record's validity ends.

If you require the record to have unlimited validity, do not change the preset value of "0" in the Valid from field and "9999" in the Valid to field. The record will then be usable in all calendar years and will appear in the list for every calendar year.

If you enter "2016" in both the Valid from and Valid to fields, the record can only be used in 2016 — meaning it will only be visible in the list during that year (see accounting period in the sidebar navigation header).

Depreciation groups defined by legislation or depreciation groups that are already in use cannot be edited in this tab.