Asset Depreciation
Asset Depreciation is the depreciation run. You choose a Till Date and, if you want, a class, group, book or single asset. On Create the screen works out every depreciation period that is due and not yet charged, one line per asset, book and period. Save posts them.
What it is for
Depreciation is never charged by itself. Somebody runs it. The run picks up every asset where it was left: from the day after its last depreciation line, or from its Run Depreciation From Date if it has never been depreciated, up to the Till Date.
The rule people get wrong: a period is charged only once it has fully ended by the Till Date. A run with Till Date 20 March charges up to 28 or 29 February, not part of March.
Every field in plain words
Everything in the header is chosen before Create and locked after it.
| Field | What it means | What to put |
|---|---|---|
| Transaction | The run's number | Given on Create |
| Posting Date | The date of the voucher | Required. Fills the financial year and period |
| Transaction Journal | The journal the voucher is made in | Required |
| Asset Class | Only assets of this class | Leave empty for all |
| Asset Group | Only assets of this group | Leave empty for all. Offers only groups of the class chosen |
| Asset Book | Only this book | Leave empty for every book |
| Asset | Only this asset | Leave empty for all |
| Till Date | Depreciate up to this date | Required. A month end, or the end of a fiscal period |
| Notes | The voucher's header text | Free text |
| Journal, Journal Indicator, Financial Year, Financial Period | From the journal and the posting date | Filled in |
Lines
Filled on Create. Read-only.
| Column | What it means |
|---|---|
| Depreciation Date | The last day of the period charged |
| Asset | The asset |
| Asset Book | The book |
| Depreciation Method | Straight line or reducing balance |
| Depreciation Amount | The charge for the period |
A run is always Posted, in the company's own currency.
How the amount is worked out
- Which assets. Every posted, not reversed Acquisition whose Run Depreciation From Date is on or before the Till Date, matching the criteria, whose value in the book is still above its floor.
- The floor. The book's Leave Net Book Value At plus the asset's salvage value. The salvage value shrinks in proportion when units are retired. No line takes an asset below its floor; the last line takes it exactly to it.
- The periods. Monthly, quarterly, half-yearly or yearly, counted from the start of the depreciation year: 1 January for a calendar profile, the fiscal year start of the book's calendar for a fiscal one. Each line is dated the last day of its period.
- Straight line. For each period: the value still to depreciate x the months of this period / the months of life left. Life ends on Run Depreciation From Date plus the life in years. Part months count by days. In the period where life ends, everything that is left is charged.
- Reducing balance. For each period: the value at the start of the depreciation year x the group's Depreciation Percentage / 12 x the months of the period. An adjustment made during the year is charged from its own date.
- Adjustments. An Acquisition Adjustment adds to the value still to depreciate. Straight line spreads it over the life left from its date.
- Rounding. Each amount is rounded to the book's Roundoff Depreciation decimal places.
How to configure it
- Make a transaction journal for this screen.
- On the Fixed Assets posting profile, give each asset group its depreciation expense and accumulated depreciation lines for the activity Depreciation. See General ledger screens.
- Decide whether to run one book at a time (pick Asset Book) or all books together.
Scenarios
- Month end, everything at once. Till Date the last day of the month, no criteria. Create, check the lines, Save.
- A quarter-yearly profile. Run monthly anyway: the quarter is charged in the run whose Till Date reaches the quarter's last day; the runs before it find nothing for those assets.
- An asset was missed for three months. The next run charges the three months it is behind, one line per period.
- The accounting book posts, the tax book should not. This screen does not read Post To General Ledger on the book: every run makes a voucher. Run the tax book only if its voucher is wanted, or reverse it.
What it is connected to
- Asset Acquisition - every posted acquisition is depreciated; a parked adjustment stops the run.
- Asset Book and Depreciation Profile - method, frequency, calendar, rounding and floor.
- Asset Group - life and reducing-balance rate (copied onto the acquisition).
- Asset Retirement - must be dated the day after the asset's last depreciation.
- What posts in assets and projects.
If something looks wrong
- "There is no Asset Depriciation on Asset ..." on Create. Nothing is due for the criteria and Till Date: every asset is depreciated up to that date, at its floor, or starts after it.
- "There are some Asset Adjustment in Park mode". An Acquisition Adjustment dated on or before the Till Date is not posted. Post or delete it, then run again.
- "Asset: ... has an unknown Depreciation Frequency: ...". The acquisition carries a frequency the run cannot read. Check the profile.
- "Asset: ... has no Asset Life". A straight-line acquisition was made with no life.
- "No Fiscal Period found in Calendar: ... for Asset: ... between ... and ...". The book's calendar (or the legal entity's) has no fiscal periods for those dates.
- "Depreciation of Asset: ... for ... is already posted". Another run already charged that asset, book and date.
- Reverse is refused: "Depreciation cannot be reversed, reverse the later transactions of its assets first : ...". A later run or a retirement exists for one of its assets. Reverse those first, newest first.
- "Reverse Date: ... cannot be less than Posting Date: ...". Reverse on or after the run's posting date.
- A run cannot be deleted. A run is always posted; it is reversed, not deleted.