Management Depreciation - Sum of Digits

This method allows assets accelerated depreciation, applying a variable rate in acquisition original value.

This method allows basing on asset expected life, in which for each year of expected useful life, calculation grants the rest of useful life for fixed assets and amounts numbers in each year. In each period, the rest of useful life is divided by this total to calculate depreciation percentage for that period. This method leads to depreciation values that are progressively reduced by the same amount in each period.

This depreciation method does not allow depreciating after the end of planned useful life, as the event ceases the counting of the asset useful life. User can change to another method after expected useful life expires.

Acquisition after start of a depreciation or capitalization lead to a positive accounting value at the end of planned life. As a consequence, said transactions are not allowed when depreciation occurs by the sum of year digits. By using this method, user treats subsequent acquisitions through subnumbers creation. Inflow year must be the same of depreciation start year.

It is compulsory filling out the field Per. Deprec. (N3_PERDEPR), that establishes asset useful life.

Calculation features:

Rate is variable and applied to asset original value.

Formulas to establish the rate:

Depreciation rate = (n-PC+1)/SD

Where:

n = period in months (if it is monthly, or in years if annual depreciation)

PC= calculation period (1 for the first depreciation, 2 for the second, n for the last)

SD= sum of digits=f0ee464e-032f-484f-ab1b-8ff27324d8f8 = 1+2+...+n

Example of monthly depreciation calculation:

Asset Value                30,000.00

Useful life (months)        60

Sum        Digits                1+2...+60 = 1830