What is depreciation method in SAP FI-AA - Asset Accounting?

SAP Term: depreciation method

• Component: FI-AA

• Component Name: Asset Accounting

• Description: A method that defines the calculation of periodic depreciation. Specifications made in the depreciation method determine the percentage by which the base value for depreciation calculation is multiplied.

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• Key Concepts: 
  Depreciation method is a way of calculating the depreciation of an asset over its useful life. It is used in SAP FI-AA Asset Accounting to determine the amount of depreciation to be charged for an asset in a given period. The depreciation method can be either linear or non-linear, depending on the type of asset and its expected useful life. 
  
  How to use it: 
  In SAP FI-AA Asset Accounting, the depreciation method is set up in the asset master record. The depreciation method can be changed at any time, but it is important to note that any changes will affect the future depreciation calculations for the asset. The depreciation method can also be set up in the company code settings, which will apply to all assets in that company code. 
  
  Tips & Tricks: 
  When setting up a depreciation method, it is important to consider the expected useful life of the asset and choose a method that best reflects this. For example, if an asset has a short useful life, then a linear depreciation method may be more appropriate than a non-linear one. 
  
  Related Information: 
  For more information on setting up and using depreciation methods in SAP FI-AA Asset Accounting, please refer to the SAP Help documentation.