WORKING WITH DG ECHO AS AN NGO PARTNER | FPA 2014 - 2020

DEPRECIATION

FAQ 25 - Can a partner sell a vehicle fully purchased under an ECHO Action if this vehicle does not have anymore an economic value based on depreciation rules of the partner? If yes, is ECHO’s prior approval required in such cases?

REMAINING SUPPLIES | END OF ACTION

If the vehicle does not have an economic value anymore, the Partner is free to decide how to use it. Therefore it can also decide to sell it, and ECHO’s prior approval is not required.

FAQ 99 - Is it possible for an Implementing Partner to charge to an ECHO-funded Action the depreciation or rental costs of its own durable equipment?

IMPLEMENTING PARTNERS | ELIGIBILITY OF COSTS

Depreciation or rental costs for the use of durable equipment may be charged to the ECHO Action in proportion to its actual use as long as the rules on eligibility in Article 10.2 (a) are observed. This possibility applies regardless of who owns the durable equipment as long as it was necessary for use in the ECHO funded Action and the normal financial safeguards were ensured.

Where the durable equipment belongs to an Implementing Partner who is not an FPA Signatory itself that Implementing Partners should use a rental/depreciation rate and methodology which is at least comparable or consistent with that (if any) used by the Partner for durable equipment in that Action. This is to avoid having dramatically different rental/depreciation rates applied in the same Action which would be hard to reconcile or justify.

The depreciation/rental costs must be reflected in the accounting system in a consistent and verifiable way.

An important exception to this is if the durable equipment was bought using ECHO Funding. In cases where ECHO has already covered or contributed to the purchase cost of a piece of durable equipment the related depreciation or rental costs can never be charged to a future ECHO funded Action - to do so would be contrary to normal financial safeguards and would constitute double funding.
In cases where it is not possible to charge rent/depreciation to an ECHO funded Action it may still possible to charge the maintenance and running costs of that durable equipment to the Action's budget.

FAQ 82 - Is it possible to charge to an ECHO-funded action a depreciation rate of an immovable asset (for example, part of the mortgage loan that the partner is paying for its local office)?

ELIGIBILITY OF COSTS

It is possible to charge a depreciation rate related to the local office building. This is different from a mortgage loan, which is not eligible under the General Conditions.

FAQ 27 - Which date should the partner use when calculating the residual economic value of an asset? Should this always be the end date of the eligibility period for the Action?

END OF ACTION

The assessment of the residual economic value will be done at the end of the eligibility period of the Action, when the partner will have to decide on the end use of the equipment fully charged to the Action. To calculate this value, the partner has to simulate the depreciation costs of the equipment as if it was proposed for a depreciation from the date of its purchase until the end of the eligibility period of the Action. This remains the same even if the equipment was used by an Implementing Partner .