Acquired Before 1/1/95 - Not Fully Depreciated 
Acquired Before 1/1/95 - Not Fully Depreciated
If there is an amount not depreciated when you takeover your old asset, or when the net book value of the asset is more than 10% of the acquisition value, then a uniform depreciation amount of residual value is recorded over 3, 4 or 5 years starting from the year with the "gap-years" after the completion of depreciation (when the net book value hits the residual value of 10% of the acquisition costs).
Machine A
Acquisition cost: 10,000,000 Won
Acquisition date: 1990.01.01
Useful life: 9 years
Depreciation method: straight-line
Residual value: 1,000,000 Won
Net book value as of 97.01.01: 3,000,000 Won
In this example, six options exist for the calculation of depreciation:
(In the assets ended ordinary depreciation on December 31 in 1994, the option 1,4 or 6 of the following options started from 1995 is admitted according to the Korean GAAP.)
Additional depreciation amount allowed by the revised CTL and GAAP:
Option: |
1 |
2 |
3 |
4 |
5 |
6 |
Year |
||||||
1997 |
1,000,000 |
1,000,000 |
1,000,000 |
1,000,000 |
1,000,000 |
1,000,000 |
1998 |
1,000,000 |
1,000,000 |
1,000,000 |
1,000,000 |
1,000,000 |
1,000,000 |
1999 |
333,000 |
250,000 |
200,000 | |||
2000 |
333,000 |
333,000 |
250,000 |
250,000 |
200,000 | |
2001 |
334,000 |
333,000 |
333,000 |
250,000 |
250,000 |
200,000 |
2002 |
334,000 |
333,000 |
250,000 |
250,000 |
200,000 | |
2003 |
334,000 |
250,000 |
200,000 |
Please assign one of the following pre-configured depreciation keys to the asset:
Option: |
1 |
2 |
3 |
4 |
5 |
6 |
Depreciation key |
KRL3 |
KRLA |
KRLB |
KRL4 |
KRLC |
KRL5 |
These depreciation keys calculate the annual depreciation amount on basis of a 10% residual value. The system changes the calculation of the depreciation when the 10% residual value is reached. After the residual value is reached, the residual value is depreciated according to the selected option.
Enter 1990 as ordinary depreciation start date and the original useful life of 9 years. The system will automatically change over to the depreciation of the residual value after the residual value percentage rate of 10% is hit.
Your company chooses to depreciate the remaining value over 3 years. In 1997, the old data takeover takes place in order to go live with SAP FI-AA. Enter KRL3 as depreciation key of the asset in the bookkeeping area and enter the first posting period of 1990 as ordinary depreciation start date.