Post interest in OAYR

Question

hi,
in depreciation area posting rule, there is a part on post interest.
may i know what is post interest and how it affects the depreciation or valuation of the asset? i read the help yet still not understand.
thanks
rgds

Answer 1

For cost accounting, you might have to calculate imputed interest on the capital tied up in assets. Therefore, the system enables you to calculate this interest per depreciation area, in addition to the depreciation and/or valuation types already mentioned (ordinary depreciation, special depreciation, unplanned depreciation, and reduction of APC)
Interest calculation is controlled in the same way as depreciation calculation, using any internal calculation key. This calculation key is itself part of the depreciation key. In addition to the base value for the calculation (for example, acquisition value or replacement value), you can also specify the interest rate using the internal calculation key. Interest calculation is carried out either until book value zero is reached, up to the end of expected useful life, or for an unlimited period.
Calculation of Interest
The calculation of interest to be posted depends fundamentally on the base value of the interest key. When you use an interest key that uses the current net book value as the base value, this net book value is taken into account to the exact period during depreciation posting. Therefore, the planned value for the distribution during the fiscal year is not the planned book value at the end of the year. Instead, the system uses the net book value determined in the posting period (period net book value).
An example of a depreciation key of this kind is the interest from the mean net book value, which is calculated as follows:
Interest amount = (NVSY + NVPER) / 2 * Interest rate / 100
NVPER = Net book value in period
NVSY = Net book value at fiscal year start
Concrete example:
Asset: Net book value at start of year = APC = 12000, useful life 10 years, straight-line depreciation = 10%
   1. Calculation of annual depreciation:
Planned annual interest: 12,000 / 10 = 1,200
          o period deprec. to be posted: 100 per period
          o net book value per period: 01 - 11,900 02 - 11,800 03 - 11.700,..., 12 - 10,800
   2. Calculation of interest 5% from mean net book value
          o planned annual interest: (12,000 + 10,800) / 2 * 5 / 100 = 570
          o interest to be posted:
period 01: (12,000 + 11,900) / 2 * 5 / 100 / 12 * 1 = 49.79
period 02: (12,000 + 11,800) / 2 * 5 / 100 / 12 * 2 = 99.17
previously posted: 49.79
to post: 99.17 - 49.79 = 49.38
period 03: (12,000 + 11,700) / 2 * 5 / 100 / 12 * 3 = 148.13
previously posted: 99.17
to post: 148.13 - 99.17 = 48.96
Edited by: m_n_novice on Aug 25, 2009 5:22 PM