To define the depreciation methods for France, this chapter contains these topics:
Section 2.2, "Straight Line - Amortissement Linéaire Pro Rata Temporis,"
Section 2.3, "Calculating Derogatory Depreciation for France."
Defining this depreciation method includes the following tasks:
Adding a user defined code
Setting up depreciation formulas
Setting up the depreciation method
On General User Defined Codes for Depreciation Method (12/DM), create code DF for Declining Balance - Dégressif.
Figure 2-1 General User Defined Codes screen
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Code | DF |
Description | Dégressif |
Special Handling Code | 1 |
Hard Coded | N |
On Depreciation Formula Revision, define the following formulas:
First and subsequent years depreciation
Last year minus one
Last year
First and Subsequent Years Depreciation
Figure 2-2 Depreciation Formula Revision screen (First and Subsequent Years)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Formula ID | D07 |
Description | % Declining Balance |
Formula | ((10 * 11) /49)*06 |
Figure 2-3 Depreciation Formula Revision screen (Last Year Minus One)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Formula ID | D22 |
Description | Dégressif Last Yr - 1 |
Formula | (10*12) |
Multiplier/Constant | 0.500000 |
Figure 2-4 Depreciation Formula Revision screen (Last Year)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Formula ID | D21 |
Description | Last Year |
Formula | 10 |
On Depreciation Rule Revisions, set up the depreciation method.
Setting up the depreciation method includes the following tasks:
Setting up reference information and conventions
Attaching the formulas to depreciation method DF
Figure 2-5 Depreciation Rule Revisions screen (Reference)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Depreciation Method | DF |
Rule Description | Dégressif |
Life (Periods) | 48 |
Initial Term Apport | Blank (defaults to 1st day of 1st month) |
Compute Direction | R |
In Service From/Thru | 01/01/2005 |
Effective From/Thru | 01/01/2005 |
Attach the following formulas to the depreciation method:
First Record: Life Years 1 and 2
Second Record: Life Year 3
Third Record: Life Year 4
First Record: Life Years 1 and 2
Figure 2-6 Depreciation Rule Revisions screen (Life Years 1 and 2)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Life Yr Frm | 1 |
Life Yr Thr | 2 |
Annual Multiplier | 0.37500000 |
Depreciation | D07 |
Basis | 504 |
SC (Secondary Percentage Continuation) | 1 |
Depr. Base/Limit | 100 |
Figure 2-7 Depreciation Rule Revisions screen (Life Year 3)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Life Yr Frm | 3 |
Life Yr Thr | 3 |
Depreciation | D22 |
Basis | 504 |
SC (Secondary Percentage Continuation) | 1 |
Figure 2-8 Depreciation Rule Revisions screen (Life Year 4)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Life Yr Frm | 4 |
Life Yr Thr | 4 |
Depreciation | D21 |
Basis | 504 |
SC (Secondary Percentage Continuation) | 1 |
Defining this depreciation method includes the following tasks:
Adding a user defined code
Setting up depreciation formulas
Setting up the depreciation method
On General User Defined Codes for Depreciation Method (12/DM), create code SL for Straight Line.
Figure 2-9 General User Defined Codes screen (Straight Line)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Code | SL |
Description | S/L for France |
Special Handling Code | 1 |
Hard Coded | N |
On Depreciation Formula Revision, define the following formulas:
First year depreciation
Years 2 through 5
Remaining days
Figure 2-10 Depreciation Formula Revisions screen (First Year)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Formula ID | JA1 |
Description | Straight Line 1st Yr |
Formula | (16/12) * (10/11) |
Multiplier/Constant | 365.000000 |
Figure 2-11 Depreciation Formula Revision screen (Years 2 through 5)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Formula ID | JA2 |
Description | S/L (year 2 - 5) |
Formula | (10/12) |
Multiplier/Constant | 5.000000 |
Figure 2-12 Depreciation Formula Revision screen (Remaining Days)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Formula ID | 100 |
Description | SL (Remaining Days) |
Formula | (10/15)*16 |
On Depreciation Rule Revisions, set up the depreciation method.
Setting up the depreciation method includes the following tasks:
Setting up reference information and conventions
Attaching the formulas to depreciation method SL
Figure 2-13 Depreciation Rule Revisions screen (Reference)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Depreciation Method | SL |
Rule Description | French Straight Line |
Life (Periods) | 60 |
Initial Term Apport | A |
Compute Direction | R |
In Service From/Thru | 01/01/2005 |
Effective From/Thru | 01/01/2005 |
Attach the following formulas to the depreciation method:
First Record: Life Year 1
Second Record: Life Years 2 through 5
Third Record: Life Year 6
Figure 2-14 Depreciation Rule Revisions screen (Life Year 1)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Life Yr Frm | 1 |
Life Yr Thr | 1 |
Annual Multiplier | 5 |
Depreciation | JA1 |
Basis | 501 |
SC (Secondary Percentage Continuation) | 1 |
Second Record: Life Years 2 through 5
Figure 2-15 Depreciation Rule Revisions screen (Life Years 2 through 5)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Life Yr Frm | 2 |
Life Yr Thr | 5 |
Depreciation | JA2 |
Basis | 501 |
SC (Secondary Percentage Continuation) | 1 |
Figure 2-16 Depreciation Rule Revisions screen (Life Year 6)
Complete the following fields with the values indicated below:
Field | Value |
---|---|
Life Yr Frm | 6 |
Life Yr Thr | 6 |
Depreciation | 100 |
Basis | 501 |
SC (Secondary Percentage Continuation) | 1 |
Derogatory depreciation is the difference between the straight line and the declining balance depreciation methods.
J.D. Edwards software allows you to calculate two different types of depreciation for the same asset. To do this, you use two ledger types:
Ledger type AA for Straight Line depreciation based on the number of days (Pro Rata Temporis)
Ledger type AX for Declining Balance depreciation (Dégressif)
At the end of every period, after you calculate the depreciation on the above ledger types, you should perform the following procedure to create the entries that are necessary for justifying the derogatory depreciation.
To calculate derogatory depreciation
Use the STAR tool to select entries where the depreciation for the period in the AX ledger (Declining Balance) is greater than that in the AA ledger (Straight Line).
Create a journal entry in the AA ledger type to:
Debit the Derogatory Depreciation account (Balance Sheet). This is the French legal Chart of Accounts account 145 Amortissements Dérogatoires.
Credit the Exceptional Expenses Allowance (Income Statement). This is the French legal Chart of Accounts account 687 Dotations Exceptionnelles.
Use World Writer to flag a field of the F0911 file so that the entries that have been flagged do not get selected again for posting to the Fixed Assets system.
Use the STAR tool to select entries where the depreciation for the period in the AX ledger (Declining Balance) is less than that in the AA ledger (Straight Line).
Create a journal entry in the AA ledger type to:
Debit the Regulated Reserves (Income Statement). This is the French legal Chart of Accounts account 787 Reprise Dotations Exceptionnelles.
Credit the Derogatory Depreciation account (Balance Sheet). This is the French legal Chart of Accounts account 145 Amortissements Dérogatoires.
When the item is disposed, it is necessary to justify the Derogatory Depreciation account (French account 145 Amortissements Dérogatoires) by item number. To do this, use the STAR tool to generate a journal entry by asset number (account included in the AAI FX range).