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<ManualTopic ID="/baanerp/tf/onlinemanual/000180" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">Using Depreciation Methods</Title>
		<Keyword><Level1>Depreciation</Level1>
			<Level2>methods</Level2>
		</Keyword>
	</Header>
	<GeneralSection><Paragraph>SSA ERP supplies depreciation methods that define types of depreciation. You apply these methods to the asset books when you set up categories in the <GUIRef href="/baanerp/tf/fam/tffam2100s000" role="session">Category (tffam2100s000)</GUIRef> session. You cannot modify the methods provided by SSA ERP, but you can create methods to depreciate assets for which existing methods are not suitable. If you run depreciation for assets with a method you created, SSA ERP uses the percentages in the method to calculate depreciation.</Paragraph>
		<List><ListIntro>SSA ERP determines what depreciation formula to use based on the method you assign to each of an asset's related books. The following methods are available:</ListIntro>
			<ListItem><Link href="#A" role="internal">Straight-line method</Link>
			</ListItem>
			<ListItem><Link href="#B" role="internal">Declining balance method</Link>
			</ListItem>
			<ListItem><Link href="#C" role="internal">Declining balance with a switch to straight-line method</Link>
			</ListItem>
			<ListItem><Link href="#D" role="internal">Sum of years digits method</Link>
			</ListItem>
			<ListItem><Link href="#E" role="internal">Sum of years digits with a switch to straight-line method</Link>
			</ListItem>
			<ListItem><Link href="#F" role="internal">Units of production method</Link>
			</ListItem>
			<ListItem><Link href="#G" role="internal">Fixed amount method</Link>
			</ListItem>
			<ListItem><Link href="#H" role="internal">Annuity method</Link>
			</ListItem>
			<ListItem><Link href="#I" role="internal">First period depreciation method</Link>
			</ListItem>
			<ListItem><Link href="#J" role="internal">NBV-oriented depreciation method</Link>
			</ListItem>
			<ListItem><Link href="#K" role="internal">Custom method</Link>
			</ListItem>
			<ListItem><Link href="#L" role="internal">None method</Link>
			</ListItem>
		</List>
		<GeneralSection ID="A"><SectionTitle>Straight-line method</SectionTitle>
			<Paragraph>Uses the straight-line formula to depreciate an asset in its related books. You specify an amount to depreciate over the course of the asset's life. For more information on the straight-line formula, refer to <Link href="/baanerp/tf/onlinemanual/000178" role="manual">To calculate Remaining Life depreciation</Link>
			</Paragraph>
			<Note><SectionTitle>Note</SectionTitle>
				<Paragraph>Some declining balance and MACRS methods switch to the straight-line method at some point during the asset's life. For a list of these methods, refer to <Link href="/baanerp/tf/onlinemanual/000189" role="manual">To calculate Declining Balance with Switch to Straight Line depreciation</Link>.</Paragraph>
				<Paragraph>Some declining balance methods switch to straight line at some point during the asset's life. For a list of these methods, refer to <Link href="/baanerp/tf/onlinemanual/000189" role="manual">To calculate Declining Balance with Switch to Straight Line depreciation</Link>.</Paragraph>
				<Paragraph>Several sum of years digits methods switch to the straight line method at some point during the asset's life. For a list of these methods, refer to <Link href="/baanerp/tf/onlinemanual/000191" role="manual">To calculate sum of years digits with switch to straight line deprec.</Link>.</Paragraph>
			</Note>
		</GeneralSection>
		<GeneralSection ID="B"><SectionTitle>Declining balance method</SectionTitle>
			<Paragraph>This method uses the declining balance formula to depreciate an asset in its related books. Over the course of the asset's life, the amount the asset depreciates will reduce. For more information on the declining balance formula, refer to <Link href="/baanerp/tf/onlinemanual/000188" role="manual">To calculate Declining Balance depreciation</Link>.</Paragraph>
			<Note><SectionTitle>Note</SectionTitle>
				<Paragraph>Some declining balance methods switch to straight line at some point during the asset's life. For a list of these methods, refer to <Link href="/baanerp/tf/onlinemanual/000189" role="manual">To calculate Declining Balance with Switch to Straight Line depreciation</Link>.</Paragraph>
				<Paragraph>Several sum of years digits methods switch to the straight line method at some point during the asset's life. For a list of these methods, refer to <Link href="/baanerp/tf/onlinemanual/000191" role="manual">To calculate sum of years digits with switch to straight line deprec.</Link>.</Paragraph>
			</Note>
		</GeneralSection>
		<GeneralSection ID="C"><SectionTitle>Declining balance with a switch to straight-line method</SectionTitle>
			<Paragraph>This method uses the declining balance with a switch to straight line formula to depreciate an asset in its related books. The asset will depreciate in its related books with the declining balance method until the point where it is more beneficial to depreciate the asset by using the straight-line method. At this point,</Paragraph>
			<Paragraph>SSA ERP automatically switches the form of depreciation to straight line. For more information on the declining balance formula, refer to <Link href="/baanerp/tf/onlinemanual/000189" role="manual">To calculate Declining Balance with Switch to Straight Line depreciation</Link>.</Paragraph>
			<Note><SectionTitle>Note</SectionTitle>
				<Paragraph>Several sum of years digits methods switch to the straight line method at some point during the asset's life. For a list of these methods, refer to <Link href="/baanerp/tf/onlinemanual/000191" role="manual">To calculate sum of years digits with switch to straight line deprec.</Link>.</Paragraph>
			</Note>
		</GeneralSection>
		<GeneralSection ID="D"><SectionTitle>Sum of years digits method</SectionTitle>
			<Paragraph>There are multiple depreciation methods that use the sum of years digits formula. You can assign one of these methods to any of an asset's related books. For more information on the sum of years digits formula, refer to <Link href="/baanerp/tf/onlinemanual/000190" role="manual">To calculate Sum of Year Digits depreciation</Link>.</Paragraph>
			<Note><SectionTitle>Note</SectionTitle>
				<Paragraph>Several sum of years digits methods switch to the straight line method at some point during the asset's life. For a list of these methods, refer to <Link href="/baanerp/tf/onlinemanual/000191" role="manual">To calculate sum of years digits with switch to straight line deprec.</Link>.</Paragraph>
			</Note>
		</GeneralSection>
		<GeneralSection ID="E"><SectionTitle>Sum of years digits with a switch to straight-line method</SectionTitle>
			<Paragraph>There are multiple depreciation methods that use the sum of years digits formula. You can assign one of these methods to any of an asset's related books. For more information on the sum of years digits formula, refer to <Link href="/baanerp/tf/onlinemanual/000191" role="manual">To calculate sum of years digits with switch to straight line deprec.</Link>.</Paragraph>
		</GeneralSection>
		<GeneralSection ID="F"><SectionTitle>Units of production method</SectionTitle>
			<Paragraph>There is only one method that uses the units of production formula. To use units of production as your depreciation calculation, you must assign the UOP method to one or more of an asset's related books. For more information on depreciation calculations for units of production, refer to <Link href="/baanerp/tf/onlinemanual/000181" role="manual">To calculate Units of Production depreciation</Link>.</Paragraph>
		</GeneralSection>
		<GeneralSection ID="G"><SectionTitle>Fixed amount method</SectionTitle>
			<Paragraph>The depreciation is a fixed yearly amount that you assign. The asset depreciates in its related books for this amount until the end of the asset life or until the asset's <Link href="/baanerp/tf/glossary/glossary#000168" role="glossary">salvage value</Link> is reached.</Paragraph>
		</GeneralSection>
		<GeneralSection ID="H"><SectionTitle>Annuity method</SectionTitle>
			<Paragraph>The depreciation amount is a fixed amount per period, but increases progressively for the annuity. The annuity consists of interest and depreciation.</Paragraph>
			<Paragraph>SSA ERP does not process the interest amounts, nor does it calculate interest on the remainder value. For more information on the annuity calculations, refer to <Link href="/baanerp/tf/onlinemanual/000193" role="manual">Calculating Annuity Depreciation</Link>.</Paragraph>
		</GeneralSection>
		<GeneralSection ID="I"><SectionTitle>First period depreciation method</SectionTitle>
			<Paragraph>The depreciation of an asset in its related books occurs entirely in the first period.</Paragraph>
		</GeneralSection>
		<GeneralSection ID="J"><SectionTitle>NBV-oriented depreciation method</SectionTitle>
			<Paragraph>The asset value is calculated by subtracting the accumulated depreciation from the current cost. The net book value is the asset value stored in the asset's related books. When you calculate or update the depreciation, or when you adjust either the cost or accumulated depreciation, the value for every asset's related book changes. If the Federal Tax book type is used, the section 179 value is also subtracted from the above calculation. For more information on calculating the NBV-oriented depreciation, refer to <Link href="/baanerp/tf/onlinemanual/000305" role="manual">Net Book Value (NBV)-oriented depreciation</Link>.</Paragraph>
		</GeneralSection>
		<GeneralSection ID="K"><SectionTitle>Custom method</SectionTitle>
			<Paragraph>This method is a freely definable depreciation method based on percentages, monthly or yearly, to cover user-specific requirements.</Paragraph>
		</GeneralSection>
		<GeneralSection ID="L"><SectionTitle>None method</SectionTitle>
			<Paragraph>No depreciation method is defined. You can use this method when an asset cannot be depreciated, for example: real estate.</Paragraph>
		</GeneralSection>
	</GeneralSection>
	<RelatedTopics><SectionTitle>Related topics</SectionTitle>
		<RelTopic><Link href="/baanerp/tf/onlinemanual/000175" role="manual">To calculate depreciation</Link>
		</RelTopic>
	</RelatedTopics>
</ManualTopic>
