Views:

Recalculating depreciation

When you make changes to specific fields in an asset book record, depreciation is recalculated. The following fields affect depreciation:

  • Amortization Code

  • Amortization Amount

  • Averaging Convention

  • Cost Basis

  • Depreciation Method

  • Depreciated To Date

  • Life to Date Depreciation

  • Luxury Automobile

  • Original Life

  • Place in Service Date

  • Salvage Value

  • Switchover

  • Year to Date Depreciation

  • Special Depr Allowance

There are three ways depreciation can be recalculated:

Reset Life Recalculates depreciation from the date it was placed in service through the date the asset already has been depreciated. Depreciation adjustments will be made for each period, but the depreciation does not have to be posted to General Ledger for each of these periods. You can use the Fixed Assets General Ledger Posting window to select a range of periods from the financial detail file, then post the entire amount to the period of the transaction date.

Reset Year Calculates a new yearly depreciation rate and uses the new rate to recalculate depreciation from the beginning of the current fiscal year—defined in the Book Setup window—through the date the asset already has been depreciated.

This depreciation does not have to be posted to General Ledger for each period. You can use the Fixed Assets General Ledger Posting window to select a range of periods from the financial detail file, then post the entire amount to the period of the transaction date.

Recalculate Calculates a new yearly depreciation rate as of the beginning of the current fiscal year defined in the Book Setup window. However, calculations are not based on the new rate until the next time depreciation is taken on the asset. The current year-to-date depreciation amount is not affected. The difference between the new yearly rate and the current year-to-date depreciation amount will be allocated over the remaining time in the current fiscal year.

  • If an asset is in the first year of life (the Place in Service Date and Depreciated To Date are in the same fiscal year), and a depreciation-sensitive field other than Year-to-date Depreciation, Life-to-date Depreciation or Depreciated-to Date changes, the new rates for depreciation will be recalculated.

  • If any of the following fields are changed—Year-to-date Depreciation, Life-todate Depreciation, or Depreciated-to Date—depreciation will be recalculated, unless the Depreciated-to Date is the last day of the year.

Keywords: Recalculating Depreciation