User manual - Chapter 2 Financial Calculation (TVM)

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uSum-of-the-Year's Digits Method
The sum-of-the-year's-digits method calculates depreciation for a given period.
12
{Y–1}
n' = n –
n (n +1)
Z =
2
2
(n' integer part +1)(n' integer part + 2*n' fraction part
)
Z' =
SYD
1 =
{Y–1}
12
n
Z
× (PV
– FV )
n'– j+2
Z'
)(PV
– FV – SYD1)( jG1)SYDj = (
RDV
1 = PV – FV – SYD1
RDVj = RDVj –1 – SYDj
n'– (n +1)+2
Z'
)(PV
– FV – SYD1)({Y–1}G12)
12–{Y–1}
12
×SYD
n+1 = (
Depreciation for an item acquired part way through a year can be calculated by month.
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uDeclining Balance Method
The declining balance method calculates depreciation for a given period.
RDV1 = PV – FV – DB1
({Y–1}G12)
({Y–1}G12)
100n
Y–1I%
DB
1 = PV ×
100n
I%
12
×
×
DB
j = (RDVj–1 + FV )
RDV
j = RDVj–1 – DBj
DBn +1 = RDVn
RDV
n+1 = 0
Depreciation for an item acquired part way through a year can be calculated by month.
SYDj : depreciation charge for the jth year
RDVj :remaining depreciable value at the
end of jth year
DBj : depreciation charge for the
jth year
RDVj :remaining depreciable
value at the end of jth year
I % :factor (%)
2-9-2
Depreciation
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