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Tax Depreciation Rate and Dep Start Date Different than Book Depreciation

Former Member
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270

Dear All

I am facing a situation where we have multiple co codes. We are using the same Asset Classes for all co codes. The tax depreciation is not applicable for the present Co Codes being productive but for a new Co Code there is a requirement of Tax Depreciation also.

The rates of the tax depreciation are different from the book depreciation and the depreciation start date is from the first day of the fiscal year even if the asset is acquired during the Fiscal year.

I would like the experts to tell me how can i handle this situation and how can i make the tax depreciation calculations applicable in this case.

as an example

I have an asset class Furniture the normal depreciation key is LINR with 10 % straight line depreciation

and now for the same Asset class the tax depreciation rate is 25 % straight line and the tax depreciation starts from January 01, xxxx even if the asset is purchased in December xxxx

I request your help to tell me how to manage this scenarios

It will be great if you mention the T codes also where to configure

Regards

Bilal Athar

malcolmshroff
Discoverer
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Hi All,

In addition to having different depreciation keys for book area and tax area, is it possible to have a scenario wherein we have different depreciation start dates for book area and tax area? If so, how can one achieve this? For example: An asset is under construction, but for tax purposes the tax authorities allow deduction based on incurrence of expenditure, then is it possible to have an asset claimed as a deduction (100% deduction in month 1 in which the asset is capitalised for tax purposes) in a period which is different to the capitalisation date for book area purposes?

I would be keen to know how this can be achieved.

 

Thanking you,

 

Malcolm  

Accepted Solutions (0)

Answers (2)

Answers (2)

MarkusBredel
Advisor
Advisor
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Hi,

you definitely have to use an additional depreciation key.

I would from your description create it as a copy from LINR, but then change period control to 06 (= fiscal year start) for acquisitions, and additionally use a declining-balance method being defined as 2,5 times straight-line max. 25% ... that´ll should do ...

Markus

Former Member
0 Kudos

Hi,

As per my knowledge you create dep.key and assign the % to the dep.key. When you are creating the asset based on the asset u can assing dep.key.

and for dep.calculation check the period control and assign period control to dep.key. system will calculate depreciation based on the period control and dep.key on the % basis.

please check and let me know.

regards,

Gopi.P