1. Fixed Assets Implementation Guide
  2. Italy Anticipated (Method 28)

Italy Anticipated (Method 28)

For the example that follows, these assumptions apply:

  • Actual Start Date: April 15, 1997.

  • Modified Start Date: January 1, 1997.

  • Cost: 10.000.000 ITL (without tax).

  • Asset Life: 4 years (48 life periods).

These tables show the depreciation of an asset when using depreciation method 28:

Year

End of Year Date

Accumulated Depreciation

Depreciation Expense

1997

December 31, 1997

-1.500.000

1.500.000

1998

December 31, 1998

-1.500.000

1.500.000

1999

December 31, 1999

-1.500.000

1.500.000

2000

December 31, 2000

-1.000.000

1.000.000

This table shows the second depreciation:

Year

2nd Accumulated Depreciation

2nd Depreciation Expense

Rule 1 Calculation

Rule 2 Calculation

1997

-1.500.000

1.500.000

10.000.000 * 15 percent

10.000.000 * 15 percent

1998

-1.500.000

1.500.000

10.000.000 * 15 percent

10.000.000 * 15 percent

1999

-1.500.000

1.500.000

10.000.000 * 15 percent

10.000.000 * 15 percent

2000

N/A

N/A

10.000.000 -30.000.00 -30.000.00

N/A
Note: The AAIs (SDA and SDE1) need to be set up for the secondary accounts. Other variations of the anticipated life-year percent are set up with method 28.

This table explains the requirements for method 28:

Requirement

Explanation

Asset life

The demonstration data includes a version of method 28 for an asset life of 48 life periods at 15 percent, 48 life periods at 20 percent, 60 life periods at 30 percent, and 84 life periods at 10 percent.

Balance adjustments

Year-end with annual depreciation

Apportioned by period in the year, based on percent

Modified start date

The modified start date is the whole year.

Conventions

Secondary Accounts are set to two accumulated depreciation accounts and to two depreciation expense accounts.

Allow Over Depreciation is set to not exceed adjusted basis and continue beyond the asset's life.

Life year rules

Life year 1 to 3 times 15 percent.

Life year 4 takes the remaining basis in the primary rule (through year 998).

Calculations

Multiply cost by 15 percent.

Basis includes the salvage value.

Disposals

Method 28 has no disposal rules.