If a declining-balance depreciation method is used to depreciate an asset, 5% of the acquisition value of that asset must be considered as scrap value in order to calculate the annual depreciation percentage rate. The year, in which the net book value of this asset hits the 5% residual value, the asset can be written off.

In the R/3 System, assets subject to the 5% residual value regulation are depreciated using a depreciation method with an assigned 5% cut-off value key.

In the year before the 5% residual value is hit, the depreciation changes over to a calculation key that depreciates the remaining net book value of the assets.

Assign a depreciation key KDnn to this asset, where nn stands for the number of years of the useful life of the asset.

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