Until December 31, 1994, Korean companies were required to determine 10% of the acquisition value of an asset as its residual value.

As of January 1, 1995, the residual value of fixed assets is determined as zero. The residual value of assets acquired before January 1, 1995 can be depreciated to zero over 3, 4 or 5 years.

In SAP R/3 old assets subject to the 10% residual value regulations are depreciated using a depreciation method with an assigned 10% scrap value key. When the net book value of the asset hits the residual value, the system stops to calculate the depreciation. In a second step the system checks whether the ratio of net book value and the acquisition cost of the asset is lower then the percentage rate entered in the configuration of the depreciation calculation key used for the asset. If this is true, the system starts to calculate the depreciation of the residual value from the following year on. The calculation of the depreciation of the residual value is done according to the change over key entered in the configuration of the depreciation calculation key used for the asset.

This calculation key is configured in a way, that for each year after the change over a fixed percentage rate is calculated. The scrap value is not considered anymore.

Following depreciation keys (ordinary calculation keys) are pre-configured: