SAP Note 26301 - General info. on depreciation method conversion

Symptom:

It is not clear when a conversion of the depreciation method is carried out.

Solution

Generally, it only decided with the annual balance carried forward whether the valuation is carried out according to the original method (calculation key) or according to the conversion method (conversion key in the calculation key).
Exceptions are:

• Conversion method '1 = conversion if the depreciation of the conversion key is greater than the one of the calculation key' .

Here the system also checks for the original acquisition, in addition to the annual balance carried forward, whether to switch to the conversion method.

• Conversion method '5 = Conversion upon end of planned life'

If the end of planned life is not a fiscal year-end, the decision as to which method applies is made individually for each transaction ( annual balance carried forward or transaction ) by means of the asset value date. The calculation for one transaction, however, is not carried out according to two methods ( period preceding the end of planned life and period following the end of planned life ). For the decision as to which method applies, it is only relevant whether the asset value date of the transaction precedes or follows the planned life. This means that a conversion following the end of the planned life for an annual balance carried forward is only carried out upon completion of the fiscal year, which is at the end of the useful life. For a transaction, it is decided individually whether its asset value date precedes or follows the end of the useful life.

Note
The conversion to another percentage rate or base value in the levels of a calculation key is not to be seen as a conversion method in this context. This conversion to another level is carried out period-specifically for each transaction.

Example of conversion following the end of planned life

• Depreciation start date: 07/01/1995

• Useful life: 5 Years

• End of useful life: 06/30/2000

• Acquisition and production costs: 100

• Depreciation method: linear, percentage rate according to useful life, base value 100% of the acquisition and production costs

• Conversion after the end of useful life: linear, percentage rate according to useful life, base value 50% of the acquisition and production costs

The result is the following depreciation development

• 1995: 10 (100/60*6)

• 1996: 20 (100/60*12)

• 1997: 20 (100/60*12)

• 1998: 20 (100/60*12)

• 1999: 20 (100/60*12)

• 2000: 18 (100/66*12) or alternatively 2000: 10 (100/60*6)

• 2001: 10 (50 /60*12)

Thus, a conversion is not carried out in the year 2000, however, the useful life is internally increased by the 6 months and the calculation is continued with the old method since it was determined, that the depreciation is to be carried out also after the end of the useful life and also 'below zero'. If you want the alternative display, you must change the calculation key so that a calculation is only carried out up to the end of the useful life and not 'below zero'.
A transaction with asset value date up to 06/30/2000 is calculated with theold method; a transaction with asset value date as of 07/01/2000 is calculated with the conversion method.

Additional key words

Conversion, T090-UMAFSL, T090-UMRPRZ, T090-UMSTM