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Hermanv

UK Declining method - Depreciation

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Good day everyone

We have a customer in RSA with a company in the UK which requires the Declining method to depreciation assets. We have tried various methods (UD, AD etc) available in X3 but does not seem to provide exactly the calcs the user is looking for.

Can someone please indicate what setup is required for the Declining method is specifically in the UK market? It seems that the user is expecting to depreciate the assets over a never ending period where as all methods we have tried requires a set life span.

Any assistance will be highly appreciated.

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  • +1
    verified answer

    You will need to create a custom depreciation method which uses a constant rate of the percentage required, for example 0.25 for 25%.

    In the Association definition ensure that the depreciation rate is managed for the plan.

    Set the asset to depreciate it over 999 years but X3 doesn't actually use the year in the calculation.

    The calculation will work as follows. In this example 10,000 capital cost at RB25%.

    Year 1    Depreciation       0.25 * 10000 = 2500
    Period Depreciation = 2500/12 = 208.33

    Year 2    0.25 * 7500 = 1875
    Period Depreciation = 1875/12 = 156.25

    Until the balance is 0

Reply
  • +1
    verified answer

    You will need to create a custom depreciation method which uses a constant rate of the percentage required, for example 0.25 for 25%.

    In the Association definition ensure that the depreciation rate is managed for the plan.

    Set the asset to depreciate it over 999 years but X3 doesn't actually use the year in the calculation.

    The calculation will work as follows. In this example 10,000 capital cost at RB25%.

    Year 1    Depreciation       0.25 * 10000 = 2500
    Period Depreciation = 2500/12 = 208.33

    Year 2    0.25 * 7500 = 1875
    Period Depreciation = 1875/12 = 156.25

    Until the balance is 0

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