Indirect formula help

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Hie

I usually use the indirect formula to calculate depreciation using the straight line method but l use too many formulas and matrices to calculate depreciation using the reducing balance method.

Any tips on use of indirect formula on reducing balance method?

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Hi Tafadzwa,

Many thanks for posting the example matrix. I will take a look at it and hopefully I can provide a soultion soon.

All the best,
Dominik

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Hie Dominik,

I have extracted the reducing balance bit from my model.

If you viewed the model with a link in my previous post, you can see that the indirect formula knows when to stop calculating depreciation. I use that formula for straight line depreciation , spreading interest in investments models and other relevant cases.

You, can see in the model l attached that the way l calculate depreciation is a bit cumbersome because l use tricks for the model to stop the spreading depreciation. I think if l use the indirect formula l can also calculate depreciation using the reducing balance method in a smart way.

Please note, companies in this country do not use a formula to calculate depreciation percentage when using reducing balance,
instead management just set a policy on the depreciable life and also the percentages.

So my question in an elaborate way is:

How can l employ the indirect formula using reducing balance method?
If they are any other intelligent formulas l can use please feel free to share.

Best Regards

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Hie Dominik,

Thanks for responding to my post.

I’m developing a complex fixed asset register model. On the straight line method l use a dynamic formula called indirect. This formula allows the modeler to tell the model when to start and stop depreciating an asset easily.
Actually, l got this trick from the modeler’s notes.

[url:1b4eyaq0]http://www.quantrix.com/Indirect_Capex.htm[/url:1b4eyaq0]

Now, i’m trying to use that same trick on calculating depreciation using reducing balance method.

Let me try to extract the matrices on my model and l will post during the course of the day, so that you can have a better picture.

Regards

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Hi Tafadzwa,

I have just created a simple model using the reducing balance method depreciation. Is this what you are looking for? See the attached file.

Please feel free to ask and/or comment.

All the best,
Dominik