Depreciation - Percentage

The BIM Depreciation Percentage calculates the depreciation expense for the period when the percentage mode is used as a basis. The depreciation is calculated based on the amortization table that is assigned to the entity. The process credits accumulated depreciation and debits depreciation expense.

The following options are discussed within this document:

• Registry Options
• Amortization Table
• Entity Master
• Depreciation Calculation
• Period End Depreciation Task

Registry Options

There are several options available to configure the depreciation settings. The switches are established by species.

1. Salvage Value Basis determines whether the salvage value is determined based on per head or weight.
1. Head - calculates the salvage value based on a dollar amount per head.
2. Percentage of Capitalization Value - depreciates a percentage of the capitalized value of the entity. For example, if the capitalized cost of the entity is $100,000 and the percentage is 25%, the depreciation expense for the entity will be 75%.
3. Weight - calculates the salvage value based on a dollar amount per lb or dollar amount per kg depending on the unit of measure utilized by the Division.
2. Amortization Salvage Mode defines the inventory basis for the salvage value. The Projected End of Flock Inventory is based on the projected head as defined by the head capitalized multiplied by the livability percentage. Current Inventory is the other option that can be selected which bases the salvage value on the current head inventory for the entity. This option is commonly used in conjunction with the Expense Inventory Depletion.
3. If the Expense Inventory Depletion option is selected, the depreciation task will expense capitalized inventory for mortality and cull incurred in the period. If the option is not selected, there will be no depreciation expense for mortality and culls incurred in the period.
4. Depreciation Schedule Mode has two options available. By Flock requires every entity to have an amortization table assigned. The period end depreciation task will not calculate unless each entity has an amortization table. By Product or Flock requires an amortization table to exist for every product. There is an option to enter a specific amortization table to an entity which will override the product amortization table if required.
5. Periodicity determines if the amortization is calculated weekly or based on a fiscal monthly period.

Amortization Table

The amortization table is created and assigned to the product. Although the parameters are assigned by product, there are options in Master Data>Entity to assign the parameters directly to the entity if the default parameters need to be overridden.

The amortization screen is divided into two sections.

• Amortizations - defines the product and the parameters relating to the amortization table.
• Amortization Data - grid to enter the curve data that calculates the depreciation amount.

1. In Admin>Business>Poultry>BIM>Amortizations, select to create a new amortization table.

Amortizations

Amortizations defines the parameters related to product and amortization method.

1. Enter the Amortization No to identify the amortization table. (alphanumeric, max 20 characters)

2. In the Amortization Name, enter the description for the amortization table.  (alphanumeric, max 50 characters)

3. Select the Animal Product No from the drop-down list of available products. If the Depreciation Schedule Mode is set to By Product or By Flock, the amortization table will be applied to any entity with the defined product unless overridden by an amortization table that is assign to a specific entity.

4. The Product Name will be derived from the selected Product No.

5. Enter the Female Livability percentage. This value will be used to determine the inventory for salvage value for the entity if the Amortization Salvage Mode is set to Projected End of Flock Inventory.

6. Enter the Male Livability percentage. This value will be used to determine the inventory for salvage value for the entity if the Amortization Salvage Mode is set to Projected End of Flock Inventory.

7. Female Salvage Weight is populated if the Salvage Value Basis = Weight. Enter the estimated female processing weight in pounds or kilos depending on the unit of measure assigned to the Division.

8. Male Salvage Weight is populated if the Salvage Value Basis = Weight. Enter the estimated male processing weight in pounds or kilos depending on the unit of measure assigned to the Division.

9. Female Salvage is the rate used to calculate the female salvage value used to calculate depreciation basis. The value depends on the Salvage Mode Basis.

   • Head - calculates the salvage value based on a dollar amount per head.

   • Percentage of Capitalization Value - depreciates a percentage of the capitalized value of the entity. For example, if the capitalized cost of the entity is $100,000 and the percentage is 25%, the depreciation expense for the entity will be 75%.

   • Weight - calculates the salvage value based on a dollar amount per lb or dollar amount per kg depending on the unit of measure utilized by the Division.

    

1. Head -  enter the value per head processed to calculate salvage value.

2. Percent of Capitalized - enter the percentage of the capitalized value that is used to calculate the salvage value.

3. Weight - enter the value per pound or kilo process to calculate the salvage value.

10. Male Salvage is the rate used to calculate the male salvage value used to calculate depreciation basis. The value depends on the Salvage Mode Basis.

    • Head - calculates the salvage value based on a dollar amount per head.

    • Percentage of Capitalization Value - depreciates a percentage of the capitalized value of the entity. For example, if the capitalized cost of the entity is $100,000 and the percentage is 25%, the depreciation expense for the entity will be 75%.

    • Weight - calculates the salvage value based on a dollar amount per lb or dollar amount per kg depending on the unit of measure utilized by the Division.

     

1. Head -  enter the value per head processed to calculate salvage value.

2. Percent of Capitalized - enter the percentage of the capitalized value that is used to calculate the salvage value.

3. Weight - enter the value per pound or kilo process to calculate the salvage value.

11. Amortization Basis is used in the HE/HH method only and specifies the expected Accumulated HE per HH at the end of the flock.

12. Amortization Weeks specifies the number of weeks from capitalization to the final date that amortization will be calculated for each entity.  This value overrides the number of weeks in the Amortization Schedule for the Percentage Method.

13. The Active flag will default as selected. If the amortization table is no longer used, de-select the active flag.

Amortization Data

The Amortization Data grid is used to enter the values for the depreciation curve by week.

1. Click on the Amortization grid and select to add a new Week.
2. In the Rate field, enter the percentage for the weekly depreciation. The total of all weeks must equal 100.00%.

Entity Master

The Depreciation Schedule Mode determines the requirement of assigning the amortization schedule to the entity. Within the entity, there is an option to override the values established in Amortizations.

The processes outlined in this section of the document are as follows:

• Assign Amortization to Entity
• Modify Amortization Details by Entity

Assign Amortization to Entity

If the Depreciation Schedule Mode>By Entity is selected in the registry, the following steps outline the process to assign the amortization table to the entity. The amortization table must be assigned based on the period end granularity. If the period end granularity is set Entity, the amortization table needs to be assigned only to the Farm-Flock level. If period end granularity is set to House, the amortization table needs to be assigned only to each of the houses for the entity.

1. In BIM>Master Data>Entities, click on the required entity
2. Right-click and select Add/Change Entities

 



 

3. Select the line for the Entity level
4. In the Amortization No field, click on the drop-down and select the required Amortization No.

 



 

5. If the period end granularity is set to Entity, the process is complete. Otherwise, repeat the process for each house if the period end granularity is set to House.

Modify Amortization Details by Entity

The amortization details can be modified by entity if required. The details entered in the entity will override any values entered in Amortizations.

1. In BIM>Master Data>Entities, click on the required entity
2. Right-click and select Add/Change Entities

 



 

3. Select the line for the Entity level
4. Enter the amortization details based on the period end granularity. If running period end by Entity, the values only need to be entered at the entity level. If period end is being run by house, then the values need to be entered for each house that needs to override the default parameters.

 



 

5. Female Salvage is the rate used to calculate the female salvage value used to calculate depreciation basis. The value depends on the Salvage Mode Basis.

   • Head - calculates the salvage value based on a dollar amount per head.

   • Percentage of Capitalization Value - depreciates a percentage of the capitalized value of the entity. For example, if the capitalized cost of the entity is $100,000 and the percentage is 25%, the depreciation expense for the entity will be 75%.

   • Weight - calculates the salvage value based on a dollar amount per lb or dollar amount per kg depending on the unit of measure utilized by the Division.

    

1. Head -  enter the value per head processed to calculate salvage value.

2. Percent of Capitalized - enter the percentage of the capitalized value that is used to calculate the salvage value.

3. Weight - enter the value per pound or kilo process to calculate the salvage value.

6. Male Salvage is the rate used to calculate the male salvage value used to calculate depreciation basis. The value depends on the Salvage Mode Basis.

   • Head - calculates the salvage value based on a dollar amount per head.

   • Percentage of Capitalization Value - depreciates a percentage of the capitalized value of the entity. For example, if the capitalized cost of the entity is $100,000 and the percentage is 25%, the depreciation expense for the entity will be 75%.

   • Weight - calculates the salvage value based on a dollar amount per lb or dollar amount per kg depending on the unit of measure utilized by the Division.

    

1. Head -  enter the value per head processed to calculate salvage value.

2. Percent of Capitalized - enter the percentage of the capitalized value that is used to calculate the salvage value.

3. Weight - enter the value per pound or kilo process to calculate the salvage value.

7. Female Salvage Weight is populated if the Salvage Value Basis = Weight. Enter the estimated female processing weight in pounds or kilos depending on the unit of measure assigned to the Division.

8. Male Salvage Weight is populated if the Salvage Value Basis = Weight. Enter the estimated male processing weight in pounds or kilos depending on the unit of measure assigned to the Division.Enter the

9. Female Livability percentage. This value will be used to determine the inventory for salvage value for the entity if the Amortization Salvage Mode is set to Projected End of Flock Inventory.

10. Enter the

11. Male Livability percentage. This value will be used to determine the inventory for salvage value for the entity if the Amortization Salvage Mode is set to Projected End of Flock Inventory.

12. Amortization Weeks specifies the number of weeks from capitalization to the final date that amortization will be calculated for each entity.  This value overrides the number of weeks in the Amortization Schedule for the Percentage Method.

13. Amortization Basis is used in the HE/HH method only and specifies the expected Accumulated HE per HH at the end of the flock.

Depreciation Calculation

The depreciation calculation is based on the parameters established in Amortization. The calculation is based from the net book value of the entity and the depreciation rate for the period. The depreciation is entered based on a weekly rate, therefor if an entity is capitalized mid-week, the rate will apply to the week that the entity is capitalized as well as the required days in the following week until the number of days for the week are met. This process will continue throughout the depreciation cycle of the entity. Click here to view the full calculation.

Period End Depreciation Task

There is a depreciation task for each module and generation. Regardless of the module and generation, the task processes in the same manner based on the parameters defined in Amortization for the product or the table that has been assigned to the entity. The purpose of the depreciation task is to credit Accumulated Depreciation and debit Depreciation Expense for each entity depreciated in the period.

1. In the Period End Task list, select the depreciation task required for the module and generation.
2. Right-click and select Calculate to start the task

 



3. When the task is finished, the Complete option with be selected

Available Journals

Once the task has been completed, the user is able to view the journals.

1. Click on the depreciation task that has the Complete flag selected.
2. Right-click and select Available Journals

 



3. The journals that are created from the depreciation task:

 

DEBIT	Depreciation Expense
CREDIT	Accumulated Depreciation

 

4. The journal screen can be filtered, sorted and grouped to view the details as required.

Depreciation Log

The Depreciation Log is created from the depreciation task. The Depreciation Log contains data specific to the entity to audit the depreciation amount for the period.

1. Click on the depreciation task that has the Complete flag selected.
2. Right-click and select Depreciation Percent Log.

 



 

3. The Depreciation Percent Log displays the depreciation details for the fiscal period based on the period end granularity. There are several fields available in the log to audit the period depreciation expense. The log can be filtered, sorted and grouped as required.

 



 

4. Complex Entity No indicates the entity that incurred the depreciation in the fiscal period. The entity will be at the granularity as defined for period end in Poultry Registry.
5. Cost Center No is derived based on the cost center assigned to the farm for the entity.
6. Begin Date is the first date of the fiscal period.
7. End Date is the last date of the fiscal period.
8. Month represents the fiscal period as defined in the Fiscal Calendar.
9. Fiscal Year represents the fiscal year for the depreciation expense as defined in Fiscal Calendar.
10. The date that the entity was capitalized is indicated in the Date Cap column.
11. First Date represents the first date in the current period that the depreciation expense is incurred. For entities capitalized in prior months, this date will always be the first date of the fiscal period. If the entity was capitalized in the period, the date will be the capitalized date as that is the date that the depreciation calculation begins.
12. Final Date is the calculated last date for depreciation date for the entity.
13. Date represents the date on the journal transaction for the depreciation expense. If the Poultry Registry>Periodicity is defined as Monthly, there will be one journal created per entity for the fiscal month. f the Poultry Registry>Periodicity is defined as Weekly, there will be one journal created for each week in the fiscal month.
14. Depreciation Amount is the calculated depreciation for the entity for the period as based on the amortization table assigned to the entity.

Depreciation Amount = Amount Left to Depreciate x Depreciation Units

15. Depreciation Units is the calculated depreciation rate for the period.
16. Net Book Value is the capitalized value of the entity less accumulated depreciation. The estimated salvage is not included in Net Book Value.
17. Salvage Amount is the amount of salvage that is expected to be incurred for the entity.
18. Amount Left to Depreciate is the capitalized value of the entity less accumulated depreciation less estimated salvage value. This value is used to calculate the period deprecation.

 



 

19. Current Raw Amort Rate represents the value directly from the amortization table.  The table is weekly and depreciation is monthly, so the program calculates a monthly summed value that prorates partial weeks to calculate a monthly rate.  This calculation is also age aligned, so the weeks are matched to flock age, not calendar weeks.
20. The percentage remaining to depreciate is represents in the Remaining Amort Percent column. The value is calculated as the sum of the remaining rates from the table, including the current period.  If the flock is at 50 weeks on the period begin date and will be amortized to week 60, then Remaining Amort Percent would be the sum of the rates from week 50 to week 60.
21. Current Adjusted Amort Rate is the calculated depreciation rate for the period. The value is calculated as defined in the example below.

• Current Raw Amort Rate = 10.91.

• Remaining Amort Percent = 46.66.

• Current Adjusted Amort Rate = 10.91 / 46.66 = 0.2338191170167167

• 0.2338191170167167 x (NBV-Salvage) = Depreciation

22. The Message column is used to display any error message or required details that occurred in the calculation of the depreciation.
23. The base details of the calculation are displayed in the Description field.
24. Generation is derived based on the entity.
25. Amortization No represents the amortization that is being used by the entity. Depending on the option selected in the Depreciation Schedule Mode, the amortization table will be derived from the product assigned to the entity or the amortization table assigned to the entity.
    • By Flock requires every entity to have an amortization table assigned. The period end depreciation task will not calculate unless each entity has an amortization table.

     

    • By Product or Flock requires an amortization table to exist for every product. There is an option to enter a specific amortization table to an entity which will override the product amortization table if required.

 



 

26. The Female Livability represents the livability percentage that has been entered for females in Amortization.
27. The Male Livability represents the livability percentage that has been entered for males in Amortization.
28. Female Salvage Value is the rate used to calculate the female salvage value used to calculate depreciation basis. The value depends on the Salvage Mode Basis.

    • Head - calculates the salvage value based on a dollar amount per head.

    • Percentage of Capitalization Value - depreciates a percentage of the capitalized value of the entity. For example, if the capitalized cost of the entity is $100,000 and the percentage is 25%, the depreciation expense for the entity will be 75%.

    • Weight - calculates the salvage value based on a dollar amount per lb or dollar amount per kg depending on the unit of measure utilized by the Division.

     

1. Head -  enter the value per head processed to calculate salvage value.

2. Percent of Capitalized - enter the percentage of the capitalized value that is used to calculate the salvage value.

3. Weight - enter the value per pound or kilo process to calculate the salvage value.

29. Male Salvage Value is the rate used to calculate the male salvage value used to calculate depreciation basis. The value depends on the Salvage Mode Basis.

    • Head - calculates the salvage value based on a dollar amount per head.

    • Percentage of Capitalization Value - depreciates a percentage of the capitalized value of the entity. For example, if the capitalized cost of the entity is $100,000 and the percentage is 25%, the depreciation expense for the entity will be 75%.

    • Weight - calculates the salvage value based on a dollar amount per lb or dollar amount per kg depending on the unit of measure utilized by the Division.

     

1. Head -  enter the value per head processed to calculate salvage value.

2. Percent of Capitalized - enter the percentage of the capitalized value that is used to calculate the salvage value.

3. Weight - enter the value per pound or kilo process to calculate the salvage value.

30. If birds are capitalized mid-week, the depreciation calculation is required to depreciate over two weekly factors. First Depreciation Week No represents the first week in the amortization table that is used in the depreciation calculation.
31. If birds are capitalized mid-week, the depreciation calculation is required to depreciate over two weekly factors. End Depreciation Week No represents the first week in the amortization table that is used in the depreciation calculation.
32. If birds are capitalized mid-week, the depreciation calculation is required to depreciate over two weekly factors. First Depreciation Rate represents the rate of the first week in the amortization table that is used in the depreciation calculation.
33. If birds are capitalized mid-week, the depreciation calculation is required to depreciate over two weekly factors. End Depreciation Rate represents the rate of the second week in the amortization table that is used in the depreciation calculation.
34. Depl Amount Sales indicates the dollar value of the spent breeders sold in the period.
35. Depl Units Sales indicates the number of the spent breeders sold in the period.
36. Depl Amount Mort&Cull indicates the dollar value of the birds that were entered in the mortality and cull fields in Field Transactions.
37. Depl Units Mort&Cull indicates the number of birds that were entered in the mortality and cull fields in Field Transactions.