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What is the depreciation plan for?
What is the depreciation plan for?

Here you will learn everything about the depreciation plan in a purchased contract?

Bledar Syla avatar
Written by Bledar Syla
Updated over a week ago

Wondering why you should create a depreciation plan in Avrios?

Purpose of the depreciation plan

The depreciation plan is intended to reflect the target useful life of your purchased vehicles. The depreciation plan has two main tasks. Firstly, it determines the financing costs in your cost overview. Secondly, it determines when a vehicle replacement is due to remind you in good time. This plan does not necessarily have to be consistent with the accounting depreciation plan, but rather serves to reflect the reality in your fleet.

How does the depreciation plan work?

Depreciation plans can be time-based, mileage-based, or both.

  • Time-based depreciation
    They indicate a number of years as the useful life and you are reminded of the vehicle replacement 10 months before the end of use. The financing costs are distributed evenly over the useful life.

  • Mileage-based depreciation
    You enter a number of kilometers as the maximum mileage. Mileage in the system is used to calculate the date on which you will reach the maximum mileage. 10 months before this date you will receive a reminder for the vehicle replacement. The financing costs are also calculated based on the kilometers driven.

  • Time and kilometer-related depreciation
    You also have the option of entering a useful life in years and a maximum mileage. In this case you will be reminded of the vehicle replacement 10 months before either of these events arrive.

Creating a new depreciation plan

You can create a depreciation plan directly in the purchase contract:

  1. Click on "Vehicles" in the menu bar on the left.

  2. Click on the license plate of the desired vehicle.
    You are now in the vehicle file.

  3. Click on the "Contracts" tab.

  4. Create a new purchase contract or click on the pencil in the upper right of the contract to adjust an existing purchase contract:
    For more information about the purchase contract read the following:
    How do I create a purchase contract?

  5. In the “Depreciation Plan” * field, select a predefined depreciation plan, or enter your data in the Usage Period and / or Maximum Mileage fields. You can fill one of the two fields, or both (see explanation above).

6. If you want to use the manually entered data for other vehicles, you can click on "Save as predefined depreciation plan", then you will find this depreciation plan in your list.
Click "Save" to apply the changes.

Managing predefined depreciation plans

You can create predefined depreciation plans as explained above, or centrally under "Settings" in the menu bar on the left. Only users with administrator rights have access to these "Settings".

  1. Click on the "Settings" tab in the menu bar on the left and select the item "Depreciation plans".

  2. Click on "+ Add" to create a new depreciation plan.

  3. Enter the useful life in years and / or the maximum mileage in kilometers.
    Click on "Save"

The depreciation plan has now been created and can be selected in the Purchase Agreement in the drop-down list in the field "depreciation plan".

To delete a predefined depreciation plan, click Settings and choose Depreciation Plans. Delete a depreciation plan by clicking on the rubbish bin on the right.

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