https://bugs.documentfoundation.org/show_bug.cgi?id=134367
Bug ID: 134367
Summary: CALC new formulas: Written down value & written down
depreciation
Product: LibreOffice
Version: 6.4.4.2 release
Hardware: All
OS: All
Status: UNCONFIRMED
Severity: normal
Priority: medium
Component: Calc
Assignee: libreoffice-bugs@lists.freedesktop.org
Reporter: testing1237...@yahoo.com
Created attachment 162481
--> https://bugs.documentfoundation.org/attachment.cgi?id=162481&action=edit
calculation sheet for the proposed formula
I have an idea about a new financial formula which i am not sure why no one has
implemented yet, maybe it is in the pipeline but i am putting this out.
Libreoffice currently has a variety of depreciation formulae, db, ddb,
amordegrc, amorlinc,sln, syd, vdb and there may be more but i have been unable
to find a suitable formulae that gives me the depreciation amount as needed.
One of the accepted methods of calculating depreciation is on "reducing balance
method" whereby, for the sake of simplicity and replicability, a predefined
rate of depreciation is given. Say, building is to be depreciated at 10% WDV or
written down value. Basically, an asset is taken at cost value and a rate of
depreciation is reduced from this value during the year and the closing balance
for that year becomes opening balance of next year and the rate of
depreciation is applied on that new opening balance and so on until either the
asset is scrapped or its value is reduced to zero, in which case, the asset is
said to be fully written off.
For example, i have set the cost of asset at 100,000 and applied a depreciation
rate of 60% over the lifetime of the asset. As you can see, each line
represents one year and opening balance of first year is reduced by 60% and
that closing balance becomes opening of next year.
I propose that we have a formula, WDV (cost,rate of depreciation,period of
calculation).
Also, a second WDVD formula to find the depreciation value for a given year
WDVD (cost,rate of depreciation,period of calculation).
Calculations are assumed to be at the end of period because that is the norm.
i have attached a sheet explaining with simple case values the need for this
formula, if i wanted to find written down value of an asset, say 3 years in a
line, i have to make a chart plotting each year and then going at it one by
one. These formulas would be immensely helpful for users working with financial
statements, etc.
For comparison, https://www.wallstreetmojo.com/written-down-value-method/
this is a link to a blogpost explaining how to calulate this WDV in excel. Note
that it is to be calculated on a per year basis and you cannot just jump to
year 7 in the example of the blog. you must calculate the values one after the
other.
This formulae is different from existing depreciation functions because they
all assume the user knows about the useful life of the asset. Here, all you
need is rate of depreciation. Also, when i mentioned "cost" in the formula, it
is assumed to be "cost-residual value" as is the norm so it need not be
mentioned again in the formula.
This is mostly used for finance/ taxation purposes where a standard
depreciation rate is given by the revenue departments to keep people from
charging all the value of asset to profits, in hopes of reducing the tax
liability.
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