German Depreciation Method Using Declining Balance with Switch to Straight Line
The legal basis of the German depreciation method using declining balance with
switch to straight line (Geometrisch-degressive AfA mit Wechsel zur linearen
AfA) is defined in EStG §§ 7.1 and 7.2 (German income tax law).
The maximum declining balance percent is calculated using the following
formula:
1 - ((Salvage/Cost)*(1/Years))
The maximum declining balance depreciation percent is set at:
30%
The maximum straight line depreciation percent is calculated using this
formula:
1 / Years
The maximum relation straight line: declining balance is set at:
1 : 3
The maximum declining balance percent is the lowest of the following:
declining balance %
- 30%
- 3 * straight line %
The depreciation is calculated for the following asset life time:
4, 5, 6, 7, 8, 10, 12, 14, 15, 18, 20, 25, 33 years (full years only)
You can view and modify these depreciation methods in the Life-Based
Depreciation Methods window.
The names of the depreciation methods are as follows:
DEG-LIN J-AFA for yearly depreciation
DEG-LIN Q-AFA for quarterly depreciation
DEG-LIN M-AFA for monthly depreciation
The methods are defined using the net book value as the calculation basis.
