<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/tf/onlinemanual/000190" xml:lang="en">
   <Header>
      <Title>To calculate Sum of Year Digits depreciation</Title>
      <Keyword type="header" order="d1e1959026">
         <Level1>Sum of Years Digits (SYD) Calculation</Level1>
      </Keyword>
      <Keyword type="header" order="d1e1959029">
         <Level1>SYD calculation</Level1>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>In the sum of Years Digits depreciation method, a fraction of an
		asset's depreciable cost is written off each year. The fraction is formed by a
		numerator equal to the remaining life of the asset, and a denominator equal to
		the sum of the number of the years of the asset's life.</Paragraph>
      <Paragraph>ERP Enterprise considers whether the asset has a life that ends evenly on a
		year-end boundary when it calculates the sum of years in the life. If the life
		ends in the middle of a year, ERP Enterprise uses a decimal amount in the sum of years
		calculation. For example, if you have an asset with a life of five years, ERP Enterprise calculates a denominator of fifteen, computed as follows:</Paragraph>
      <Paragraph>(5 + 4 + 3 + 2 + 1) = 15</Paragraph>
      <Paragraph>For an asset with a life of five years and three months, the
		sum of the years digits is 16.25, computed as follows:</Paragraph>
      <Paragraph>(5.25 + 4.25 + 3.25 + 2.25 + 1.25) = 16.25</Paragraph>
      <Paragraph>ERP Enterprise uses the resulting fraction to determine the annual depreciation
		amount. After calculating the annual depreciation expense, ERP Enterprise then
		proportionally divides each year's expense across the number of periods for
		that year.</Paragraph>
      <ExampleSection>
         <SectionTitle>Example</SectionTitle>
         <Paragraph>Years of depreciation = 5</Paragraph>
         <Paragraph>cost = $ 10,000</Paragraph>
         <Paragraph>Depreciation:</Paragraph>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>year 1:   $ 10,000 * 5 / 15 = $ 3,333.33</Paragraph>
         </Formula>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>year 2:   $ 10,000 * 4 / 15 = $ 2,666.67</Paragraph>
         </Formula>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>year 3:   $ 10,000 * 3 / 15 = $ 2,000.00</Paragraph>
         </Formula>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>year 4:   $ 10,000 * 2 / 15 = $ 1,333.33</Paragraph>
         </Formula>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>year 5:   $ 10,000 * 1 / 15 = $   666.67</Paragraph>
         </Formula>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>Sum:                          $10,000.00</Paragraph>
         </Formula>
      </ExampleSection>
      <GeneralSection>
         <SectionTitle>Note</SectionTitle>
         <Paragraph>If the asset for which you are calculating depreciation
		  contains an averaging convention, ERP Enterprise adjusts
		  the depreciation expense for the first half-year, quarter, or month
		  calculation. For more information, refer to <Link href="/baanerp/tf/onlinemanual/000176" role="manual">Calculations and Averaging Conventions</Link>.</Paragraph>
         <List>
            <ListIntro>Sum of Years Digits (SYD) has two variations based on the
			 calculation mode in use for the asset in its related books:</ListIntro>
            <ListItem>SYD daily</ListItem>
            <ListItem>SYD periodic</ListItem>
         </List>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>SYD daily</SectionTitle>
         <ProcedureList>
            <ListIntro>In the Sum of Years Digits Daily formula, ERP Enterprise considers
			 the exact number of days in each period when calculating the depreciation
			 expense for each period. ERP Enterprise performs three steps each time it calculates depreciation:</ListIntro>
            <ListItem>Determines the annual depreciation expense for the current
			 year and the next year.</ListItem>
            <ListItem>Calculates the change per period.</ListItem>
            <ListItem>Calculates the exact depreciation amount for the current
			 period, based on the annual expense and the change value.</ListItem>
         </ProcedureList>
         <Paragraph>The following formulas are used:</Paragraph>
         <List>
            <ListItem>U.S. tax books:</ListItem>
         </List>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>Depreciation = (cost - salvage - Sec179) * (business percentage/100) *
(remaining years in life / sum of years)
</Paragraph>
         </Formula>
         <List>
            <ListItem>Other books:</ListItem>
         </List>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>Depreciation = (cost - salvage) * (remaining years in life / sum of years)
</Paragraph>
         </Formula>
         <Paragraph>For <Link href="/baanerp/tf/glossary/glossary#000139" role="glossary">MACRS</Link> and <Link href="/baanerp/tf/glossary/glossary#000104" role="glossary">ACRS</Link> the salvage value is
		  not applied to depreciation of U.S. tax and commercial books.</Paragraph>
         <Paragraph>To calculate the current period's depreciation:</Paragraph>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>
[(current year's depreciation / 365) * days in period] + 
[change per period * (x - y - days in the period)]
</Paragraph>
         </Formula>
         <Paragraph>The following applies to the above formula:</Paragraph>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>change per period = (current year's depreciation - next year's depreciation) / 365 / 365
</Paragraph>
         </Formula>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>x = [ ( 184 - days from the start of the year to the start of the current  period) * 
( 185 - days from the start of the year to the start of the current period) ] / 2
</Paragraph>
         </Formula>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>y = [ ( 184 - days from the start of the year to the start of the current period
days in the current period) * ( 185 - days from the start of the year to the
start of the current period - days in the current period) ] / 2</Paragraph>
         </Formula>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>SYD periodic</SectionTitle>
         <ProcedureList>
            <ListIntro>In the Sum of Years Digits Periodic formula, ERP Enterprise considers
			 the exact number of days in each period when calculating the depreciation
			 expense for each period. ERP Enterprise performs three steps:</ListIntro>
            <ListItem>Determines the annual depreciation expense for the current
			 year and the next year.</ListItem>
            <ListItem>Calculates the change per period.</ListItem>
            <ListItem>Uses this value to calculate the exact depreciation amount
			 for the current period.</ListItem>
         </ProcedureList>
         <Paragraph>The following formulas are used:</Paragraph>
         <List>
            <ListItem>U.S. tax books:</ListItem>
         </List>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>Depreciation = (cost - salvage - Sec179) * (business percentage / 100) *
(remaining years in life / sum of years)</Paragraph>
         </Formula>
         <List>
            <ListItem>Other books:</ListItem>
         </List>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>Depreciation = (cost - salvage) * (remaining years in life / sum of years)</Paragraph>
         </Formula>
         <Paragraph>For <Link href="/baanerp/tf/glossary/glossary#000139" role="glossary">MACRS</Link> and <Link href="/baanerp/tf/glossary/glossary#000104" role="glossary">ACRS</Link> the salvage value is
		  not applied to depreciation of U.S. tax and commercial books.</Paragraph>
         <List>
            <ListItem>To calculate the current period's depreciation:</ListItem>
         </List>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>
( current year's depreciation / 12) + (change per period * [ (number of
periods + 1) / 2 ] - current period number)
</Paragraph>
         </Formula>
         <Paragraph>The following applies to the above formula:</Paragraph>
         <Paragraph>change per period = (current year's depreciation - next year's
		  depreciation) / 12 / 12</Paragraph>
         <Paragraph>current period number = The position of the current period in
		  the current year of the asset's life. For example, in a fiscal year beginning
		  in January, February is 2.</Paragraph>
      </GeneralSection>
   </GeneralSection>
</ManualTopic>