Straight Line Period Control Method 
Straight line period control is a depreciation method that involves exercising control over the depreciation amount of each individual period in an asset's useful life. The method calculates an asset's depreciation in a period by multiplying the straight line depreciation amount in the period by a factor you define.
SAP Business One provides the following two kinds of period control:
Standard – You can apply the same factor for depreciation calculation to all periods in an asset's useful life.
To define the factor, on the Calculation tab of the Depreciation Types - Setup window, enter a value in the Factor field.
Individual – You can apply different factors for depreciation calculation to different periods in an asset's useful life.
SAP Business One lets you define a factor for each month. To do so, open the Depreciation Period Control window by choosing the Period Control pushbutton in the asset master data.
Straight Line Period Control Method
Select one of the following depreciation calculation methods:
|
Enter the annual percentage rate for the depreciation calculation.
The field is available only if you have selected Percentage of Acquisition Value in the Calculation Method field. End of the note. |
NoteSelect one of the following:
|
Do one of the following:
With the straight line period control method, the factor also has an effect on the remaining life of an asset. For example, one asset has a planned useful life of 60 months and depreciates using the standard period control method with a factor of 1.5. After the first year, the asset is considered having passed 18 months (12 * 1.5) of its useful life and its remaining life is 42 months instead of 48 months. For more information, refer to the two examples below. End of the note. |
The checkbox is available only if you have selected Standard in the Depreciation Period field. End of the note. Indicates that the factor you specified is effective only in the first fiscal year of an asset's useful life. Once you select the checkbox, the system calculates the asset depreciation in the first year of its useful life with the specified factor. In the following years, the system does not consider the factor when calculating the asset depreciation. |
Example
Standard Period Control
Asset X
Acquisition and Production Costs: 60,000 USD
Useful Life: 60 Months
Depreciation Method: Straight Line Period Control
Calculation Base: Yearly
Depreciation Period: Standard
Factor: 2
Capitalization Date: January 1st, 2010
The asset depreciation is calculated in different ways, depending on the different calculation methods.
Acquisition Value/Total Useful Life
The system calculates the monthly depreciation as follows:
60000 USD / 60 * 12 * 2 / 12 = 2000 USD
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
2010
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2011
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2012
2000
2000
2000
2000
2000
2000
2013
2014
Percentage of Acquisition Value
Annual Percentage = 20%
The system calculates the monthly depreciation as follows:
60000 USD * 20% * 2 / 12 = 2000 USD
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
2010
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2011
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2012
2000
2000
2000
2000
2000
2000
2013
2014
Net Book Value/Remaining Life
The system calculates the monthly depreciation for each year as follows:
2010
60000 USD / 60 * 12 * 2 / 12 = 2000 USD
2011
As the depreciation amount in 2010 equals two years' depreciation amount calculated with the straight line method, the asset is considered having passed two years of its useful life at the end of 2010. Therefore, the monthly depreciation of year 2011 is calculated as follows:
(60000 USD – 2000 USD * 12) * 2 / (60 – 12 * 2) = 2000 USD
2012
As the depreciation amount in the first two years equals four years' depreciation amount calculated with the straight line method, the asset is considered having passed four years of its useful life at the end of 2011. Therefore, the monthly depreciation of year 2012 is calculated as follows:
(60000 USD – 2000 USD * 12 * 2) * 2 / (60 – 12 * 4) = 2000 USD
At this rate, the asset is fully depreciated after the first six months in 2012.
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
2010
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2011
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2012
2000
2000
2000
2000
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2000
2013
2014
With all the above calculation methods, the asset depreciates twice as quickly as with the straight line method, and the overall useful life of the asset is shortened to 30 months as a result.
Example
Individual Period Control
Asset Y
Acquisition and Production Costs: 60,000 USD
Useful Life: 60 Months
Depreciation Method: Straight Line Period Control
Depreciation Period: Individual
Capitalization Date: January 1st, 2010
Jan. |
Feb. |
Mar. |
Apr. |
May |
Jun. |
Jul. |
Aug. |
Sep. |
Oct. |
Nov. |
Dec. |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Depreciation |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
||||||
Factor |
2 |
2 |
2 |
2 |
2 |
2 |
The asset depreciation is calculated in different ways, depending on the different calculation bases and methods.
Calculation Base: Yearly
Calculation Method: Acquisition Value/Total Useful Life
The system calculates the yearly depreciation as follows:
60000 USD / 60 * (2 + 2 + 2 + 2 + 2 + 2) = 12000 USD
Each year, the 12,000 USD is allocated to the six months as follows:
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
2010
2000
2000
2000
2000
2000
2000
2011
2000
2000
2000
2000
2000
2000
2012
2000
2000
2000
2000
2000
2000
2013
2000
2000
2000
2000
2000
2000
2014
2000
2000
2000
2000
2000
2000
Calculation Base: Monthly
Calculation Method: Percentage of Acquisition Value
Annual Percentage = 20%
The system first calculates the monthly percentage as follows:
20% / 12 = 1.67%
Then, the depreciation for the months with a factor of 2 is calculated as follows:
60000 USD * 1.67% * 2 = 2004 USD
To make sure the depreciation does not cause the asset's book value to fall below zero, the depreciation in the last month of the asset's useful life is calculated as follows:
60000 USD – [2004 USD * (6 * 4 + 5)] = 1884 USD
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
2010
2004
2004
2004
2004
2004
2004
2011
2004
2004
2004
2004
2004
2004
2012
2004
2004
2004
2004
2004
2004
2013
2004
2004
2004
2004
2004
2004
2014
2004
2004
2004
2004
2004
1884
Calculation Base: Monthly
Calculation Method: Net Book Value/Remaining Life
The system calculates the depreciation for each month as follows:
2010: January
60000 USD / 60 * 2 = 2000 USD
2010: March
As the depreciation amount in January equals two months' depreciation amount calculated with the straight line method, the asset is considered having passed two months of its useful life in March. Therefore, the depreciation of March is calculated as follows:
(60000 USD – 2000 USD) / (60 – 1 * 2) * 2 = 2000 USD
2010: May
As the depreciation amount in January and March equals four months' depreciation amount calculated with the straight line method, the asset is considered having passed four months of its useful life in May. Therefore, the depreciation of May is calculated as follows:
(60000 USD – 2000 USD * 2) / (60 – 1 * 4) * 2 = 2000 USD
...
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
2010
2000
2000
2000
2000
2000
2000
2011
2000
2000
2000
2000
2000
2000
2012
2000
2000
2000
2000
2000
2000
2013
2000
2000
2000
2000
2000
2000
2014
2000
2000
2000
2000
2000
2000