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

SAP Term: tax depreciation

• Component: FI-AA

• Component Name: Asset Accounting

• Description: The calculation of depreciation amounts that are allowed because of special tax regulations. Typically, the allowed tax depreciation amounts exceed the book depreciation amount. In the SAP System, you can manage the difference between tax depreciation and book depreciation using special accounts. Using this procedure, you can display the difference between valuation for tax depreciation and the book depreciation as a special item on the liabilities side reserve for special depreciation of the balance sheet.

Smart SAP Assistant

• Key Concepts: 
  Tax depreciation is a method of accounting used to spread the cost of an asset over its useful life. It is used in SAP's FI-AA Asset Accounting component to calculate the depreciation of an asset for tax purposes. This calculation is based on the asset's purchase price, estimated useful life, and any applicable tax laws. 
  
  How to use it: 
  In SAP's FI-AA Asset Accounting component, tax depreciation can be calculated by entering the asset's purchase price, estimated useful life, and any applicable tax laws into the system. The system will then calculate the depreciation of the asset for tax purposes. 
  
  Tips & Tricks: 
  When calculating tax depreciation in SAP's FI-AA Asset Accounting component, it is important to ensure that all applicable tax laws are taken into account. Additionally, it is important to ensure that the estimated useful life of the asset is accurate in order to get an accurate calculation of the depreciation. 
  
  Related Information: 
  Tax depreciation can also be calculated manually using a variety of methods such as straight-line or double-declining balance. Additionally, there are various online tools available that can help with calculating tax depreciation.