Chart of Depreciation

Depreciation:

A reduction in the value of an asset with the period of time, due in particular to wear and tear.

 Types of Depreciation:

v Straight line method without basis reduction: 

v Straight line method with basis reduction: 

v Diminishing balance method

Chart of  Depreciation:

Charts of depreciation are used in order to manage various legal requirements for the depreciation and valuation of assets. These charts of depreciation are usually country-specific and are defined independently of the other organizational units. A chart of depreciation, for example, can be used for all the company codes in a given country 

Country-Specific Charts of Depreciation

In the simplest scenario, all of wer company codes are in the same country and are subject to the same legal requirements for asset valuation, meaning that we only need one chart of depreciation.

Integration

Chart of Depreciation integration we can do at two levels.

v Company code level

v Chart of account level

Company Code/Chart of Depreciation

We have to assign each company code defined in Asset Accounting to exactly one chart of depreciation. In the interests of keeping asset values uniform in our company, we should restrict the number of charts of depreciation used to as few as possible. Company codes in countries with the same valuation rules or company codes of a certain industry sector generally use the same chart of depreciation.

Chart of Accounts/Chart of Depreciation

The assignment of a company code to a chart of accounts is independent from its assignment to a chart of depreciation. This means that several company codes can use the same chart of accounts, although they have different charts of depreciation (and vice versa).