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Caluclation of shift based depreciation under Companies Act 2013

Former Member
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There is a recent changes in method of calculation of depreciation in India under New Companies Act 2013 compared to Schedule XIV of Companies Act 1956.

Depreciation needs to be calculated based on useful lives instead of % based calculation. In case of Plant & Machinery, shift based depreciation needs to be calculated as under:

(a) For Single shift: Useful life mentioned under Companies Act 2013 i.e. 15 years

(b) For double shift: depreciation to be increased by 50% [i.e. 50% of depreciation amount calculated under point (a)]

(c) For triple shift: depreciation to be increased by 100% [i.e. 100% of depreciation amount calculated under point (a)]

What is the best possible solution available in SAP for calulation of shift based depreciation as per above mentioned requirements?

Accepted Solutions (0)

Answers (2)

Answers (2)

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For all the above mentioned shifts, maintain variable proportion as 50% in the depreciation area/key settings and check results. Useful life of asset can be 15 but based on the shift maintained and the proportion the asset will further depreciate till 5% residual value.

Hope this helps.
Muralitharan Thyagarjan

Former Member
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Hello Amit,

We need to create a depreciation key based on useful life and assign it to asset dep area 01. Further we need to maintain variable portion of depreciation as 50.0000 for depreciation area 01 and depending on shift we need to maintain shift factor as For single shift -1 for double shift -2 and for triple shift 3.

Further, for new assets acquired after 01/04/2014 we can change our existing dep keys with % calculated as 100 - 5%  / useful life. and calculate the variable portion as= 1- ( single shift % /double shift dep %). there you need to maintain shift factor as 0 for single shift, 1.01 for double shift and 2 for three shifts.

Hope  this helps..

thank you,

Ravindra Mahajan

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Hi Ravindra,

Can you please elaborate on following points:-

1. Variable depreciation % for second shift & third shift.

2. Should the useful life in years & periods be changed in Depreciation areas tab for double & triple shift?

3. Shift factor for second & third shift.


CA. Harnish Shah

Former Member
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1) Variable depreciation portion % for second shift & third shift will remain same

2)You don't need to change useful life

3)you just need to maintain a number of shifts in the time-dependent tab.