1. Depreciation Management Aligned with Accounting Standards 🔍

✅ Key Differences in IFRS Depreciation Standards

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✅ Understanding IFRS and Its Role in Depreciation

International Financial Reporting Standards (IFRS) provide a globally recognized framework for financial statements, ensuring accuracy and consistency in fixed asset depreciation.

• IFRS (International Financial Reporting Standards):
  • Assets are recognized at acquisition cost, with depreciation calculated daily over the asset’s useful life.
  • Requires periodic impairment tests to assess fair value.
  • Supports multiple depreciation methods, including straight-line, declining balance, and units of production.

2. Key Depreciation Concepts and SELLEASE Implementation 📊

✅ Depreciation Terminology and Calculation Formulas

📌 Acquisition Cost (Initial Cost): The total cost of acquiring an asset.

• Formula: Acquisition Cost = Purchase Price + Additional Costs (taxes, transportation, etc.)

📌 Useful Life: The estimated period an asset remains productive.

📌 Carrying Amount at the End of the Previous Period: The asset’s book value at the end of the prior fiscal year.

• Formula: Carrying Amount = Acquisition Cost - Cumulative Depreciation (up to previous period)

📌 Cumulative Depreciation: The total depreciation accumulated since acquisition.

• Formula: Cumulative Depreciation = Carrying Amount at Previous Period-End - Current Depreciation Expense

📌 Current Depreciation Expense: The depreciation expense recorded for the current fiscal period.

• Formula (Straight-Line Method): Depreciation Expense = (Acquisition Cost - Carrying Amount at Previous Period-End) ÷ Useful Life
• Formula (Declining Balance Method): Depreciation Expense = Book Value × Depreciation Rate

📌 Current Book Value: The asset’s value after depreciation.

• Formula: Current Book Value = Acquisition Cost - Cumulative Depreciation

✅ Configuring Depreciation Methods in SELLEASE

The SELLEASE Solution enables businesses to configure depreciation methods in compliance with IFRS:

• Straight-Line Method: Depreciation Expense = (Acquisition Cost - Residual Value) ÷ Useful Life
• Declining Balance Method: Depreciation Expense = Book Value × Depreciation Rate
• Units of Production Method: Depreciation Expense = (Acquisition Cost - Residual Value) × (Current Usage ÷ Total Expected Usage)

SELLEASE ensures full compliance with IFRS depreciation policies, supporting transparent financial reporting.

3. Implementing Depreciation Accounting Standards 📑

✅ Key Depreciation Policy Configurations

📌 Define useful life and residual value for each asset
📌 Select depreciation methods aligned with corporate accounting policies (Straight-Line, Declining Balance, etc.)
📌 Access depreciation records by fiscal year and month
📌 Export depreciation reports to Excel for audit compliance

4. Conclusion 🌟

SELLEASE provides automated, IFRS-compliant fixed asset depreciation management, ensuring businesses maintain accurate financial records and regulatory compliance.

With SELLEASE, companies can streamline depreciation tracking, enhance financial transparency, and optimize asset management. Implement a comprehensive depreciation management system today and achieve greater financial integrity and operational efficiency! 🚀

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