Unscheduled amortisation (SAP Business One)

the Unscheduled amortisation recognises unforeseen and non-regular impairments of assets that exceed scheduled depreciation and amortisation. It is recognised if there is a permanent impairment and serves as a realistic representation of the company's asset situation.

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Typical causes:

Accidents or total losses (e.g. destroyed company car)
Technical wear and tear or economic loss of value (e.g. outdated machines)
Bad debt losses from uncollectible customer receivables
Price losses on financial investments
Spoilt or devalued stock

Types of assets affected:

Fixed assets: Property, plant and equipment, intangible assets, financial assets
Current assets: Receivables, inventories, securities (strict lower of cost or market principle)

Legal basis:

HGB (§ 253): Differentiation between scheduled and unscheduled depreciation
EStG (section 6 (1) no. 1 sentence 3): The benchmark is the going-concern value - i.e. the estimated market value
IFRS: IAS 36 regulates the impairment test, IAS 16 and IAS 38 the application to fixed assets
UGB (Austria): § Section 204 UGB contains corresponding regulations for fixed assets

Posting:

recognised in profit or loss via the account "Impairment losses"
In cost accounting, possibly as Imputed risks treated

Special features in SAP Business One:

Recording via Manual amortisation with selection of the type "Unscheduled depreciation"
No automatic control - Manual receipt required

Reversal of impairment losses:

IFRS: Reversal of impairment losses possible if reasons for amortisation no longer apply
HGB: Prohibition of reversal of impairment losses on fixed assets

Example: A machine is severely damaged in a production accident. The fair value falls permanently below the book value. An impairment loss is recognised in SAP Business One. The carrying amount is reduced to correctly reflect the actual recoverability.