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Style

Design

Comment

Header 1

Header1

Header 2

Header2

Input

100

A user driven input

Demo

100

Values needed to demonstrate the principle in a complete model would b

Empty_cell

A cell that is left intentionally blank to avoid the risk of error

Off-Sheet

100

Total
Unit / Info

The sum of elements above, including sub-totals


USD millions

Line Summary
Table Header
Flag
Balance

A link to another worksheet to minimise the number of inter-worksheet ref

100
Qtr

Explanatory text showing helpful information and the units/dimensions of


The SUM() of everything to the right
Header of a table or of an off-sheet reference

Binary flag - set up as conditional formatting rather than a 'Style'


The closing balance of a control account

rate the principle in a complete model would be dynamically coded or set-up differently

y blank to avoid the risk of error


to minimise the number of inter-worksheet references (slow and risky)

e, including sub-totals

elpful information and the units/dimensions of the calculations

off-sheet reference

ditional formatting rather than a 'Style'

Tutorial: Asset Schedule


Inputs
Inputs specific to the answer
Asset details
Useable life
Accounting depreciation (SL)
Tax depreciation (DV)

Yr(s)
% p.a.
% p.a.

Profile
Capex

US$m

Inflation
Forecast

Tax
Year
Rate

Year
%

12 Yr(s)
8.33%
40.00%
2012
10.00

3.00%

2012
30.00%

Inputs to support demonstration


Timing
Model start date

Date

Constants
Days in year
Months per quarter
Months per year

Days
Months
Months

2013
64.00

31-Dec-11

365
3
12

2013
30.00%

This inputs page is set up to contain all the key


bits of information provided in the question. We
are keeping it separate from the calculations to
help promote transparency in line with
internationally recognised modeling standards.

2014
69.00

2015
99.00

2016
89.00

2017
39.00

2018
34.00

2019
23.00

2020
29.00

2014
30.00%

2015
30.00%

2016
28.00%

2017
28.00%

2018
28.00%

2019
28.00%

2020
28.00%

2021
69.00

2022
99.00

2023
89.00

2024
39.00

2025
34.00

2026
23.00

2027
29.00

2021
28.00%

2022
28.00%

2023
28.00%

2024
28.00%

2025
28.00%

2026
28.00%

2027
28.00%

2028
69.00

2029
99.00

2028
28.00%

2029
28.00%

Tutorial: Asset Schedule


Calculations
Period start
Period end

31-Dec-11

Counters
Year
Year counter
Inflation

Year
#Num
%

3.00%

Assets
Capex (real)
Capex (nominal)

US$m
US$m

1,006.00
1,314.44

Accounting depreciation
Balance b/f
Capex
Depreciation
Balance c/f

US$m
US$m
US$m
US$m

Depreciation
Periods to include

#Num

Depreciation

US$m

Year(s)
12
% p.a.
8.33%

The first big challenge in th


the straight line depreciatio
that doesn't require a giant

831.50

Tax depreciation
Balance b/f
Capex
Depreciation
Balance c/f
Depreciation
Depreciation

US$m
US$m
US$m
US$m

US$m

Deferred tax
Accounting depreciation
Tax depreciation

US$m
US$m

Difference

US$m

Tax rate

Deferred tax asset / (liability)


Balance b/f
Movement due to tax rate
Temporary differences
Balance c/f

US$m
US$m
US$m
US$m

40.00%

The second challenge is in testing your


understanding of deferred tax and how to
1,148.43tax asset or liability on
calculate it. The deferred
a balance sheet is the result of timing
differences, most easily seen in differences in
the accounting and tax treatment of

30.00%

Questions
Question 1
Start year
End year

Year
Year

Include?
Total nominal capex

[1,0]
US$m

Answer:

Selection

Question 2
Target year
Closing balance

Year
US$m

Answer:

Selection

Question 3
Target year
Closing balance

Year
US$m

Answer:

Selection

Question 4
Difference

US$m

Answer:

Selection

Question 5
Target year
Closing balance
(Note - a negative balance is a liability)

Year
US$m

Answer:

Selection

2012
2021

598.33
B

2017
298.31
A

2019
68.18
D

2.19
A

2028
(79.03)

1-Jan-12
1-Jan-13
1-Jan-14
1-Jan-15
1-Jan-16
1-Jan-17
1-Jan-18
1-Jan-19
31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19

2012
1
1.00

10.00
10.00

2013
2
1.03

2016
5
1.13

2017
6
1.16

2018
7
1.19

2019
8
1.23

89.00
100.17

39.00
45.21

34.00
40.60

23.00
28.29

9.17
68.76
129.54
10.00
65.92
73.20
108.18
(0.83)
(6.33)
(12.43)
(21.44)
129.54
The first big9.17
challenge68.76
in this solution
is to get 216.27
the straight line depreciation calculated in a way
that doesn't require a giant table. See the next

216.27
100.17
(29.79)
286.65

286.65
45.21
(33.56)
298.31

298.31
40.60
(36.94)
301.97

301.97
28.29
(39.30)
290.96

69.00
73.20

2015
4
1.09

99.00
108.18

64.00
65.92

2014
3
1.06

0.83

6.33

12.43

21.44

29.79

33.56

36.94

39.30

10.00
(4.00)
6.00

6.00
65.92
(28.77)
43.15

43.15
73.20
(46.54)
69.81

69.81
108.18
(71.20)
106.80

106.80
100.17
(82.79)
124.18

124.18
45.21
(67.76)
101.63

101.63
40.60
(56.89)
85.34

85.34
28.29
(45.45)
68.18

46.54

71.20

82.79

67.76

56.89

45.45

nd challenge is in testing your


nding of deferred tax and how to
it. The deferred tax asset4.00
or liability28.77
on
e sheet is the result of timing
es, most easily seen in differences in
unting and tax treatment of
0.83
6.33
4.00
28.77

12.43
46.54

(3.17)

(22.44)

(34.11)

30.00%

30.00%

30.00%

21.44
29.79
33.56
36.94
39.30
71.20
56.89
Once
you have82.79
tracked the 67.76
amount of the
difference45.45
and the change
in the DTA / DTL, it becomes important to understand how the
balance
change due (34.20)
to a change (19.95)
in the tax rate.(6.15)
If the tax rate
(49.76) may (53.00)
decreases, we would expect to see a reduction n the size of our
liability or asset. Here, we see that we initially had a 32.84m liability,
30.00%
28.00%by 2.19m
28.00%
28.00%
which
was 'reduced'
due to the
reduction 28.00%
in the tax rate.

(0.95)
(0.95)

(0.95)
(6.73)
(7.68)

(7.68)
(10.23)
(17.92)

(17.92)
(14.93)
(32.84)

(32.84)
2.19
(14.84)
(45.49)

(45.49)
(9.58)
(55.07)

(55.07)
(5.59)
(60.66)

(60.66)
(1.72)
(62.38)

1
10.00

1
65.92

1
73.20

1
108.18

1
100.17

1
45.21

1
40.60

1
28.29

1-Jan-20
1-Jan-21
1-Jan-22
1-Jan-23
1-Jan-24
1-Jan-25
1-Jan-26
1-Jan-27
31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24 31-Dec-25 31-Dec-26 31-Dec-27

2020
9
1.27

2021
10
1.30

2022
11
1.34

2023
12
1.38

2024
13
1.43

2025
14
1.47

2026
15
1.51

2027
16
1.56

29.00
36.74

69.00
90.03

99.00
133.05

89.00
123.20

39.00
55.60

34.00
49.93

23.00
34.79

29.00
45.18

290.96
36.74
(42.36)
285.33

285.33
90.03
(49.86)
325.50

325.50
133.05
(60.95)
397.60

397.60
123.20
(71.21)
449.58

449.58
55.60
(75.02)
430.17

430.17
49.93
(73.68)
406.42

406.42
34.79
(70.48)
370.73

370.73
45.18
(65.23)
350.68

10

11

12

12

12

12

12

42.36

49.86

60.95

71.21

75.02

73.68

70.48

65.23

68.18
36.74
(41.96)
62.95

62.95
90.03
(61.19)
91.79

91.79
133.05
(89.93)
134.90

134.90
123.20
(103.24)
154.86

154.86
55.60
(84.19)
126.28

126.28
49.93
(70.48)
105.72

105.72
34.79
(56.21)
84.31

84.31
45.18
(51.80)
77.69

41.96

61.19

89.93

103.24

84.19

70.48

56.21

51.80

49.86
61.19

60.95
89.93

71.21
103.24

75.02
84.19

73.68
70.48

70.48
56.21

65.23
51.80

(11.33)

(28.98)

(32.02)

(9.17)

3.20

14.28

13.44

28.00%

28.00%

28.00%

28.00%

28.00%

28.00%

28.00%

(62.27)
(3.17)
(65.44)

(65.44)
(8.12)
(73.56)

(73.56)
(8.97)
(82.52)

(82.52)
(2.57)
(85.09)

(85.09)
0.90
(84.19)

(84.19)
4.00
(80.20)

(80.20)
3.76
(76.44)

42.36
41.96
e difference and the change
o understand how the
the tax rate. If the tax rate
0.39
uction n the size of our
itially had a 32.84m liability,
28.00%
reduction in the tax rate.

(62.38)
0.11
(62.27)

1
36.74

1
90.03

0
-

0
-

0
-

0
-

0
-

0
-

1-Jan-28
1-Jan-29
31-Dec-28 31-Dec-29

2028
17
1.60

2029
18
1.65

69.00
110.72

99.00
163.63

350.68
110.72
(66.11)
395.29

395.29
163.63
(75.98)
482.94

12

12

66.11

75.98

77.69
110.72
(75.37)
113.05

113.05
163.63
(110.67)
166.01

75.37

110.67

66.11
75.37

75.98
110.67

(9.26)

(34.69)

28.00%

28.00%

(76.44)
(2.59)
(79.03)

(79.03)
(9.71)
(88.74)

0
-

0
-

Tutorial: Asset Schedule


Depreciation example
Period start
Period end

1-Jan-12
1-Jan-13
1-Jan-14
1-Jan-15
1-Jan-16
1-Jan-17
1-Jan-18
1-Jan-19
1-Jan-20
1-Jan-21
1-Jan-22
1-Jan-23
1-Jan-24
1-Jan-25
1-Jan-26
1-Jan-27
1-Jan-28
1-Jan-29
31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24 31-Dec-25 31-Dec-26 31-Dec-27 31-Dec-28 31-Dec-29

"Standard" approach
Year
Year counter

Year
#Num

2012
1

Capex (nominal)

US$m

1,314.44

10.00

65.92

73.20

108.18

100.17

36.74

90.03

133.05

Purchases
Purchase in period 1
Purchase in period 2
Purchase in period 3
Purchase in period 4
Purchase in period 5
Purchase in period 6
Purchase in period 7
Purchase in period 8
Purchase in period 9
Purchase in period 10
Purchase in period 11
Purchase in period 12
Purchase in period 13
Purchase in period 14
Purchase in period 15
Purchase in period 16
Purchase in period 17
Purchase in period 18
Total

US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m

10.00
65.92
73.20
108.18
100.17
45.21
40.60
28.29
36.74
90.03
133.05
123.20
55.60
49.93
34.79
45.18
110.72
163.63
1,314.44

10.00
10.00

65.92
65.92

73.20
73.20

108.18
108.18

100.17
45.21
40.60
28.29
36.74
- A typical -approach for- depreciation- - setting - out purchases
- period in separate
for each
- lines, identifying
the purchase
amount
and
100.17
45.21
40.60
28.29
36.74

90.03
90.03

This results in a cumbersome table.


Imagine 18 years of monthly data, 216
-rows. 216 x -216 cells just- for a single asset
133.05
123.20
55.60
49.93
133.05
123.20
55.60
49.93

Depreciation
Purchase in period 1
Purchase in period 2
Purchase in period 3
Purchase in period 4
Purchase in period 5
Purchase in period 6
Purchase in period 7
Purchase in period 8
Purchase in period 9
Purchase in period 10
Purchase in period 11
Purchase in period 12
Purchase in period 13
Purchase in period 14
Purchase in period 15
Purchase in period 16
Purchase in period 17
Purchase in period 18
Total

US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m

831.50

0.83
0.83

0.83
5.49
6.33

1,314.44

10.00

65.92

831.50

0.83

Rate
8.33%

2013
2

"OFFSET" approach
Capex (nominal)

US$m

Depreciation
Periods to include

#Num

Depreciation

US$m

Year(s)
12
% p.a.
8.33%

2
6.33

2014
3

2015
4

2016
5

2017
6
45.21

0.83
0.83
0.83
0.83
5.49
5.49
5.49
5.49
6.10
6.10
6.10
6.10
9.01
9.01
9.01
8.35
8.35
3.77
This approach
still requires
some -fancy
modelling
- to stop the-account overdepreciating
using MIN()
and SUM()
This first row is a counter of how many
- retrospectively
- in the
periods
to include
12.43When depreicating
21.44
29.79
33.56
SUM().
an
item over 12
years then in any given period we will only
include items paid within the previous 12
years. Hence the cap of 12.
73.20
108.18
100.17
45.21

3
12.43

4
21.44

5
29.79

6
33.56

2018
7
40.60

2019
8
28.29

2020
9

2021
10

2022
11

2023
12
123.20

2024
13
55.60

2025
14
49.93

2026
15

2027
16

2028
17

2029
18

34.79

45.18

110.72

163.63

34.79
34.79

45.18
45.18

110.72
110.72

163.63
163.63

0.83
5.49
6.10
9.01
8.35
3.77
3.38
36.94

0.83
0.83
0.83
0.83
0.83
5.49
5.49
5.49
5.49
5.49
6.10
6.10
6.10
6.10
6.10
9.01
9.01
9.01
9.01
9.01
8.35
8.35
8.35
8.35
8.35
3.77
3.77
3.77
3.77
3.77
3.38
3.38
3.38
3.38
3.38
2.36
2.36
2.36
2.36
2.36
3.06
3.06
3.06
3.06
7.50
7.50
7.50
11.09
11.09
10.27
The final- result is the -sum of each-column,
therefore- if we can find
- a better way
- to calculate
just this line we will save a lot of calculations and
39.30
42.36
49.86
60.95
71.21

5.49
6.10
9.01
8.35
3.77
3.38
2.36
3.06
7.50
11.09
10.27
4.63
75.02

6.10
9.01
8.35
3.77
3.38
2.36
3.06
7.50
11.09
10.27
4.63
4.16
73.68

9.01
8.35
3.77
3.38
2.36
3.06
7.50
11.09
10.27
4.63
4.16
2.90
70.48

0.00
8.35
3.77
3.38
2.36
3.06
7.50
11.09
10.27
4.63
4.16
2.90
3.77
65.23

3.77
3.38
2.36
3.06
7.50
11.09
10.27
4.63
4.16
2.90
3.77
9.23
66.11

3.38
2.36
3.06
7.50
11.09
10.27
4.63
4.16
2.90
3.77
9.23
13.64
75.98

40.60

28.29

55.60

49.93

34.79

45.18

110.72

163.63

7
36.94

Step 2.
SUM all identified capex together.
This essentially calculates the
depreciable asset base for items
that are still on the books.

8
39.30

36.74

9
42.36

90.03

10
49.86

133.05

11
60.95

123.20

12
71.21

Step 3.
The final step is to take the asset
base and multiply it by the per-period
depreciation value. If this were a
monthly or quarterly model, this
would need to be scaled back

=SUM( OFFSET( H55 , 0 , 0 , 1 , 1 , -H58)) * $C$60


Step 1.
The OFFSET function is used to refer to the current
period's capex (H55), and extend the range to a width
up to 12 years wide (H59).
The negative instructs the function the range to
extend to the left. For numbers less than 12, this is to
avoid the OFFSET range looking too far to the left
hand side and including line summaries or
references, or worse, going off the sheet and causing

12
75.02

12
73.68

12
70.48

12
65.23

12
66.11

12
75.98