Dear Experts,
Our compay has a requirement where the current UOP(Unit Of Production) depreciation method needs to be changed in line with IFRS accounting. Where the Estimated Future Capex for oil ( in order to extract the estimated reserves) must be included in the calculation of the UOP depreciation to be charged.
In the current actual method, we depreciate the oil asset on the following basis:
Depreciation Expense = Net book value * Units produced in the period / reserves
The new method would be as follows:
Depreciation Expense = (Net book value + Estimated Future Capex) * Units produced in the period /Estimated Total Reserves.
The Estimated Future Capex will not be shown in the books of accounts only for the purpose of depreciation calculation.
How to perform this calculation in SAP.
Thank you
LIN