To use Annuity depreciation

A depreciation method that is based on interest rates and that meets European requirements. During the asset life, the depreciation amount increases. The amount is calculated in the calculation book. If there is no depreciation amount in the calculation book, depreciation is not taken into account. The annuity depreciation is calculated as follows:

Annuity = Basis * i * {( 1 + i ) to the power n} / ({( 1 + i ) to the power n} - 1 )

Depreciation = Annuity - i * Basis of Year

where:

Basis = book value at the first year

Basis of Year = book value at the beginning of the actual year

i = interest percentage / 100

n = number of years with annuity depreciation

Example

Basis = 200,000

i = 8 % / 100 = 0.08

n = 5 years

Annuity = 200,000 * 0.08 * 1.08 5 / ( 1.08 5 - 1) = 50,091.29

Year Annuity calculation Annuity
1 50,091.29 - 0,08 * 200,000.00 34,091.29
2 50,091.29 - 0.08 * 165,908.71 36,818.59
3 50,091.29 - 0.08 * 129,090.12 39,764.08
4 50,091.29 - 0.08 * 89,326.04 42,945.21
5 50,091.29 - 0.08 * 46,380.83 46,380.82
Sum   199,999.99