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.

Mexico specifics

For tax purposes, depreciation of acquired tangible and intangible assets must use the straight-line depreciation method. This method is used at the maximum rates specified for each asset in the Mexican income tax law. Freight and handling, insurance, commissions, and fees are allowed in addition to purchase value of the asset. Depreciation and amortization are calculated for full months starting with the month when the asset was purchased. There is no allowance for estimated salvage values.

How Infor meets the requirement

For Asset Accounting predefined depreciation calculation methods, see the Asset Accounting setup section in Financials Setup and Administration Guide.

To create a depreciation method setup, see the Asset Accounting setup section in Financials Setup and Administration Guide.