How to Calculate Diminshing Depreciation

Question

Hi Everyone,
My task it so calculate dimishing depreciation,the exact requirement
Meter number(s) will be given as input along with a specified date (which may be a future date also). The program is supposed to calculate the depreciated value of the meter from the time of acquisition to the specified date. The depreciated value calculation is to be done as per the specifications given by Meter Testing Dept. as follows:
1)     Method of calculation:            Diminishing value
2)      Rate of depreciation:
Meters purchased up to 1991:      6.00 %
Acquisition Date before 31.03.1991
Purchase year 1992 & 1993:       8.24%
Acquisition Date between 01.04.1992 to 31.03.1993
Meters purchased after 1993:       12.77%
Acquisition Date between 01.04.1993 to 31.03.2005
4)      Calculation of partial year: Rounded to nearest year
Acquisition Date after 01.04.2005 calculate on Monthly basis and after 12 months the value is Zero.
pls help me in this regard or if u want any otther info let me,
Thanks,
CAPC

Answer 1

Hi CAPC,
for the meters purchased until 31.03.2005
  - determine acquisition year ("Rounded to nearest year")
  - determine depreciation percentage according to purchase date
  - determine year for result ("Rounded to nearest year")
and then
[symbolic code]
value = <acquisition value>.
DO <result year> - <acquisition year> times.
  value = value * ( 100 - <depreciation percentage> ) / 100.
ENDDO.
For meters with "Acquisition Date after 01.04.2005" (should be  01.04.2005 or later, because after 01.04.2005 does not include 01.04.2005) there i a contradiction in specification: What is "Rounded to nearest year" with "Monthly basis". Probably they want to express that they choose linear depreciation for those meters: Value = <month after acquisition> / 12 for the first 12 months, ZERO after.
Regards,
Clemens
P.S.: Why not use ASSET MANAGEMENT depreciation methods?
[added P.S.]
Message was edited by:
        Clemens Li