Depreciation, Depletion & Amortization (DD&A) Overview
This document provides a detailed overview of depreciation in an economic model. The main property (econ function) is the depreciation object in the given schema. Although there is just one econ function the request body for the model differs entirely depending on what modelType is chosen.
Example Response
{
"id": "641b5c0332567300122ba426",
"copiedFrom": null,
"name": "DD&A Test",
"tags": [],
"unique": false,
"createdBy": "6283eac6241df8001331f6a3",
"lastUpdatedBy": "6283eac6241df8001331f6a3",
"createdAt": "2023-03-22T19:50:27.325Z",
"updatedAt": "2023-07-18T20:26:00.297Z",
"depreciation": {
"modelType": "depreciation",
"prebuilt": "acr_3",
"taxCredit": 3,
"tangibleImmediateDepletion": 5,
"intangibleImmediateDepletion": 5,
"tangibleDepletionModel": "unit_of_production_major",
"intangibleDepletionModel": "unit_of_production_major",
"tcjaBonus": true,
"bonusDepreciation": [
{
"tangibleBonusDepreciation": 2,
"intangibleBonusDepreciation": 1
}
],
"depreciation": [
{
"year": 1,
"tanFactor": 33.33,
"tanCumulative": 33.33,
"intanFactor": 33.33,
"intanCumulative": 33.33
},
{
"year": 2,
"tanFactor": 44.45,
"tanCumulative": 77.78,
"intanFactor": 44.45,
"intanCumulative": 77.78
},
{
"year": 3,
"tanFactor": 14.81,
"tanCumulative": 92.59,
"intanFactor": 14.81,
"intanCumulative": 92.59
},
{
"year": 4,
"tanFactor": 7.41,
"tanCumulative": 100,
"intanFactor": 7.41,
"intanCumulative": 100
}
]
}
}
Econ Function
depreciation: (required) This object includes the following properties:modelType,prebuilt,taxCredit,tangibleImmediateDepletion,intangibleImmediateDepletion,tangibleDepletionModel,intangibleDepletionModel,tcjaBonus,bonusDepreciation, anddepreciation.
depreciation
modelType(required) A string that represents the type of DD&A model.prebuilt(read-only) A string representing what pre-built depreciation model was used.taxCredit(only required for depreciation model type) A number representing the % tangible Fed Tax Credit.tangibleImmediateDepletion(only required for depletion model type) A number representing the tangible immediate depletion.intangibleImmediateDepletion(only required for depletion model type) A number representing the intangible immediate depletion.tangibleDepletionModel(only required for depletion model type) A string representing the tangible depletion model used.intangibleDepletionModel(only required for depletion model type) A string representing the intangible depletion model used.tcjaBonus(only required for depreciation model type) A Boolean that represents whether or not to use TCJA bonus depreciation.bonusDepreciation(only required for depreciation model type) An array that contains an object that contains fields for bonus depreciation.depreciation(only required for depreciation model type) An array that contains objects of fields that represent annual depreciation.
bonusDepreciation
tangibleBonusDepreciation(only required for depreciation model type) A number that represents tangible bonus depreciation.intangibleBonusDepreciation(only required for depreciation model type) A number that represents intangible bonus depreciation.
depreciation
year(read-only) An integer that represents the year of depreciation.tanFactor(only required for depreciation model type) A number representing the tangible factor as a percentage.tanCumulative(read-only) A number representing the tangible cumulative as a percentage.intanFactor(only required for depreciation model type) A number representing the intangible factor as a percentage.intanCumulative(read-only) A number representing the intangible cumulative as a percentage.
Example depreciation Request Body (depreciation model)
{
"name": "Depreciation Test",
"unique": false,
"depreciation": {
"modelType": "depreciation",
"taxCredit": 0,
"tcjaBonus": true,
"bonusDepreciation": [
{
"tangibleBonusDepreciation": 5.97,
"intangibleBonusDepreciation": 3.867
}
],
"depreciation": [
{
"tanFactor": 5.97,
"intanFactor": 4.059
},
{
"tanFactor": 3,
"intanFactor": 3.059
},
{
"tanFactor": 2.99,
"intanFactor": 2.29
},
{
"tanFactor": 1.25,
"intanFactor": 0.89
},
{
"tanFactor": 0.029,
"intanFactor": 0.05
}
]
}
}
Example depreciation Request Body (depletion model)
{
"name": "Depletion Test",
"unique": false,
"depreciation": {
"modelType": "depletion",
"tangibleImmediateDepletion": 5,
"intangibleImmediateDepletion": 5,
"tangibleDepletionModel": "unit_of_production_BOE",
"intangibleDepletionModel": "ecl"
}
}
Definitions
prebuilt
A read only string representing what pre-built depreciation model was used. This is only used in the ComboCurve UI to rapidly populate bonusDepreciation and depreciation arrays.
intanFactor
A number that represents the intangible factor as a percentage. The minimum value is 0 and the maximum value is 100. The minimum decimal precision is 0.000001. This field is only required for the depreciation model type.
intangibleBonusDepreciation
A number that represents intangible bonus depreciation. The minimum value is 0 and the maximum value is 100. The minimum decimal precision is 0.000001. This field is only required for the depreciation model type.
intangibleDepletionModel
A string representing the intangible cost depletion model used. Depleted items such as initial purchase price can be deducted against income for taxation by several methods and applied separately for the amounts located in intangible. Be mindful when 15% Percentage Depletion is selected in General Options as the greater of that or the applied method below will be used in ComboCurve calculations. Possible values are:
unit_of_production_major- a.k.a. UOP (Major Phase) - Units of Production which is the current monthly production of the major phase divided by EUR times the running balance of the basis.unit_of_production_BOE- a.k.a. UOP (BOE) - Units of production which is the current monthly production of the well using the BOE factor divided by EUR times the running balance of the basis.ecl- a.k.a. Deduct at Economic Limit - For items that can't be written off until plugging, sale, etc.never- a.k.a. No Depletion - Do not deduct any depletion for this particular item.fpd- a.k.a. Expense at FPD - Deduct 100% of the entire amount in the year the expenditure is made. This field is only required for the depletion model type.
intangibleImmediateDepletion
A number representing the percent of intangible immediate deduction. It is the amount of intangible CAPEX to immediately deplete on the spend date. The minimum value is -10000000000000000000 and the maximum value is 10000000000000000000 (10,000,000,000,000,000,000). The minimum decimal precision is 0.000001. This field is only required for the depletion model type.
modelType
A string that represents the type of DD&A model. Possible values are "depreciation" or "depletion". Depending on what is chosen the request body that is accepted is entirely different.
tanCumulative
(read-only) A number representing the tangible cumulative as a percentage. This value is automatically calculated based on previous tanFactor fields in the depreciation array. This field is only applicable to the depreciation model type.
tanFactor
A number representing the tangible factor as a percentage. The minimum value is 0 and the maximum value is 100. The minimum decimal precision is 0.000001. This field is only required for the depreciation model type.
tangibleBonusDepreciation
A number that represents tangible bonus depreciation. The minimum value is 0 and the maximum value is 100. The minimum decimal precision is 0.000001. This field is only required for depreciation model type
tangibleDepletionModel
A string representing the tangible cost depletion model used. Depleted items such as initial purchase price can be deducted against income for taxation by several methods and applied separately for the amounts located in tangible for modeling purposes only since tangible items are never depleted. Be mindful when 15% Percentage Depletion is selected in General Options as the greater of that or the applied method below will be used in ComboCurve calculations. Possible values are:
unit_of_production_major- a.k.a. UOP (Major Phase) - Units of Production which is the current monthly production of the major phase divided by EUR times the running balance of the basis.unit_of_production_BOE- a.k.a. UOP (BOE) - Units of production which is the current monthly production of the well using the BOE factor divided by EUR times the running balance of the basis.ecl- a.k.a. Deduct at Economic Limit - For items that can't be written off until plugging, sale, etc.never- a.k.a. No Depletion - Do not deduct any depletion for this particular item.fpd- a.k.a. Expense at FPD - Deduct 100% of the entire amount in the year the expenditure is made. This field is only required for the depletion model type.
tangibleImmediateDepletion
A number representing the percent of tangible immediate deduction. It is the amount of tangible CAPEX to immediately deplete on the spend date. The minimum value is -10000000000000000000 and the maximum value is 10000000000000000000 (10,000,000,000,000,000,000). The minimum decimal precision is 0.000001. This field is only required for the depletion model type.
taxCredit
A number representing the % tangible Fed Tax Credit. This is the immediate tax credit (CAPEX times credit %). The minimum value is -10000000000000000000 and the maximum value is 10000000000000000000 (10,000,000,000,000,000,000). The minimum decimal precision is 0.000001. This field is only required for depreciation model type
tcjaBonus
A Boolean that represents whether or not to use TCJA bonus depreciation. The default false will allow manual Bonus Depreciation entry. true applies Bonus Depreciation from this Tax Cuts and Jobs Act schedule by investment year
- 2010-11: 100%
- 2012-17: 50%
- 2018-22: 100%
- 2023: 80%
- 2024: 60%
- 2025: 40%
- 2026: 20%
- 2027+: 0%. TCJA is intended to be stand-alone, not double-dipped with manual Bonus Depreciation entry. The pre-built depreciation models are the % factors applied to the remaining amount after all bonuses. This field is only required for depreciation model type
year
(read-only) An integer that represents the year of depreciation. This value is ordered based on the order of depreciation objects. This field is only applicable to the depreciation model type
intanCumulative
(read-only) A number representing the intangible cumulative as a percentage. This value is automatically calculated based on previous intanFactor fields in the depreciation array. This field is only applicable to the depreciation model type.