Depreciation Types 
Depreciation Types
Use
You specify the depreciation types and valuation types allowed for each depreciation area in FI-AA Customizing (Depreciation). The system then issues an error message and rejects posting when you try to use a type of depreciation that is not explicitly allowed.
Features
The following depreciation or valuation types are supported:
Ordinary Depreciation
Ordinary depreciation is the planned deduction for wear and tear during normal use of an asset.
Special Depreciation
Special depreciation represents deduction for wear and tear on an asset from a purely tax-based point of view. This form of depreciation allows percentage depreciation, possibly staggered within a period allowed by the tax authority, without taking into account the actual wear and tear on the asset.
Unplanned Depreciation
Ordinary depreciation reflects the deduction for wear and tear during the normal use of the asset. Unusual influences, such as damage which leads to a permanent decrease in the value of the asset, are covered by unplanned depreciation.
Transfer of Reserves/Reduction of APC
Reduction of APC allows you to reduce the depreciation base of an asset by a given amount. This type of depreciation has to be posted manually. It cannot be posted automatically using depreciation keys like the other depreciation types.
It is possible to illustrate this type of depreciation using income tax law in certain countries. According to such laws, you are allowed to transfer the gain from the sale of an asset to a replacement acquisition. As a result you can distribute the taxation of the gain over the expected useful life of the replacement acquisition (refer to
Special system functions support the creation and writeoff of these special reserves. (refer to
Derived Depreciation Areas ).Interest
For internal accounting purposes, it is also relevant to evaluate the fixed capital tied up in an asset in addition to the depreciation. You can account for the tied up capital by calculating imputed interest (refer to
Calculation of Interest).The system treats the calculation of imputed interest as a depreciation type, since it is also controlled by depreciation keys and calculation methods, similarly to the calculation of depreciation..