Enhanced Depreciation - First Year Percentage Reduction in Depreciation Rate
Independently of the acquisition date of the fixed asset, you can use the % First Year Reduction options on the Value 1, 2 and 3 Depreciation tabs of Asset Records (FAS), to specify the percentage reduction for the first year of depreciation on each individual asset, in the different value currencies.
Example
Italian law allows for 50% of the normal depreciation value for the first year. In this case, the remaining 50% is depreciated after the last scheduled period.
- Fixed asset bought on 01/03/06
- Fixed asset gross value: EUR 1000
- Standard depreciation rate: 20%
- 50% reduction in depreciation rate for first year.
| Year | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 |
| Ordinary Depreciation, Euros | 100 | 200 | 200 | 200 | 200 | 100 |
| Remaining Asset Value, Euros | 900 | 700 | 500 | 300 | 100 | 0 |
In this example, the normal yearly depreciation would have ended in 2010 (considering the asset depreciates for a full year in its first year). With the 50% depreciation in the first year, the depreciation ends in 2011.