This information describes helpful information about using derived value models.

• When you post transactions for a value model that contains derived value models, the derived value model transactions are posted automatically in journals, purchase orders, or free text invoicing. If you prepare the primary value model transactions in the Fixed assetsjournal, however, you can view and modify the amounts of the derived transactions before posting them.

• Certain accounts, such as sales tax and customer or vendor accounts, are updated only once by postings of the primary value model. The derived value model transactions are posted to the accounts that have been defined for the derived value model in Posting profiles

• Acquisitionis often used as the Transaction typefor the derived value models. You use this when the value model and the derived value model should be applied to the fixed asset from the time of acquisition of the fixed asset.

• Other values for the Transaction typealso can apply. For example, if the primary value model and the derived value models have the same intervals regarding sale or disposal, all fixed asset transaction types are available for the setup of a derived value model.

Example

Cars are depreciated by two depreciation methods. For accounting purposes, Straight line service life, depreciation is used, and for tax purposes, Reducing balanceis used.

Suppose that the acquisition price for both value models is 100,000. Refer to the following information to see how to set up depreciation methods with the derived value model functionality.

1. Create the value models in Value models.

   • The value model for accounting: VM 1, Posting layer Current, Straight line life remainingdepreciation.

   • The value model for tax purposes: VM 2, Posting layer Tax, Reducing balancedepreciation.

2. On VM 1, click the Derived value modelstab, and select VM 2 in the Value modelfield, and Acquisitionin the Transaction typefield.

The value models then can be attached to specific fixed assets.

When an acquisition is posted for a fixed asset with value model VM 1, the acquisition is posted not only on VM 1, but also on the derived value model VM 2. The status of both fixed asset value models is updated to Open, and the fixed asset can now be depreciated in the Currentand Taxposting layers each time you post the primary value model depreciation.