Multiple concurrent depreciation methods
Because of local reporting requirements, international financial reporting standards (IFRS), and local taxation reporting requirements, various algorithms can be used to calculate depreciation:
- Straight Line
- Reducing Balance
- Double Declining Balance
- Usage
- Sum of Digits (rule of 78)
- MACRS
- ACRS
- Reducing Balance switching to Straight Line
- Double Declining Balance switching to Straight Line
Straight Line and Reducing Balance are the most common depreciation methods in use. The co-existence of corporate and taxation depreciation calculations is required.
Various base values are used for depreciation, such as acquisition value, 50% of acquisition value, replacement value, and 50% of replacement value.
India specifics
These are the India specific requirements:
- In addition to corporate depreciation methods, local accounting and tax depreciation methods are required
- Income tax depreciation is an annual calculation
- For seasonal companies, depreciation is calculated according to the number of working days
- Depreciation is calculated according to asset usage, that is, shift patterns.
- Write off Value: Assets under a certain cost are fully written down in the first period of their economic life
- Asset blocks: For a company’s annual income tax depreciation computation, depreciation/capital allowances can be calculated based on an asset pool or a tax asset group book value
How Infor meets the requirement
This requirement is not currently supported by this ERP for this country.