The stage method is an advanced depreciation method used in the financial accounting is used to divide the useful life of an asset into several phases and to depreciate according to the rates defined for each phase. SAP Business One provides an integrated solution to implement the stage method for accurate and flexible depreciation of fixed assets.
In SAP Business One, companies can divide the useful life of an asset into several phases, and for each phase create a Depreciation rate and a validity period. This allocation allows for a depreciation pattern that changes gradually over time, thus reflecting the varying use and value of the asset over its lifetime.
The main components of the tiered approach in SAP Business One include:
- Stage: Several stages can be specified here, with each stage representing a phase in the useful life of an installation.
- Basis: The choice between the acquisition value and the net book value as the basis for the depreciation calculation in each phase.
- Number of years: Determination of the duration of each phase.
- Annual percentage rate: Definition of the depreciation rate applied for the calculation of depreciation in each phase.
Annual depreciation is calculated either by multiplying the difference between acquisition value and residual value or between residual book value and residual value by the annual percentage rate, depending on the basis chosen.
The integration of the stage method in SAP Business One facilitates differentiated and accurate depreciation of assets, taking into account the different value and usage dynamics over the useful life. This method helps improve asset management and financial reporting, and assists companies in complying with financial accounting and legal requirements.