Depreciation Calculation

The Depreciation Calculation command calculates the depreciation due in this period for each asset in Fixed Assets. If an asset record is allocated to a number of locations, a separate depreciation record is calculated for each location. The command also processes any disposed assets for the period. If any new assets have been added to Fixed Assets in this period, the depreciation calculated will depend on the details entered on the Opening Balance form for the asset.

You would normally run the depreciation calculation at the end of each period and then run the Period End command.

After the depreciation calculation, assets are marked as depreciated for the period. You can run the depreciation calculation more than once in a period but an asset cannot be depreciated twice in the same period. If you add new assets you can run the depreciation calculation again to depreciate those assets. A new asset’s status is changed from 'New' to ‘Live’ when the first depreciation is run but it is possible to reset the status back to 'New' using the Override command. However, after the depreciation calculation is run and the Period End command is run, you cannot revert a 'Live' asset to the previous status of ‘New’.

Depreciation Methods in Fixed Assets

Disposals

Disposals posted on an asset record cannot be undone once the depreciation calculation has been run. You can undo depreciation calculations for individual assets using the Override command in Fixed Assets Processing. If you undo a depreciation calculation in this way you will need to run the depreciation calculation again.

Depreciation Report

Depreciation transactions for this period are created on each asset and the depreciation to-date, depreciation this-year and current net book value are updated. A depreciation report is displayed after depreciation is calculated:

• The Full Report shows details of all assets including those that have already had depreciation calculated for this period. The comments section of the depreciation report shows a note if the asset is fully depreciated, if depreciation is backdated and also if there is no depreciation.

• The Summary Report shows details for the assets processed during that depreciation calculation.

If Include Zero Depreciation Assets is selected, the report includes assets that are depreciated by a zero amount in the period (for example, manual depreciation with zero for this period). Assets that have not been depreciated in the period (for example, fully depreciated) will not be included.

Nominal Ledger Postings

The Depreciation Account (Profit and Loss) is debited and the Depreciation To-Date Account (Balance Sheet) is credited with the amount of depreciation this period. These accounts are defined on the Asset Category that is linked to each asset.

Note: Extra depreciation or adjustment transactions may also be posted as a result of other transactions made during the period.

Real Time Update

If Fixed Assets is linked to the Nominal Ledger and the Real Time Update of Nominal Ledger option on the Company Profiles form is ticked, the Nominal Ledger is updated automatically at the end of the process.

If you use this feature, unless a message is displayed to the contrary, either the Nominal Ledger or the Nominal Ledger Transfer file is updated:

• The Nominal Ledger is updated if the current period/year in Fixed Assets is the same as in the Nominal Ledger or earlier than the Nominal Ledger.

• The Transfer file is updated if the current period/year in Fixed Assets is later than the Nominal Ledger.

Batch Update

If Fixed Assets is linked to the Nominal Ledger but the Real Time Update of Nominal Ledger option is not ticked, you must update the Nominal Ledger separately in the N/L Analysis and the Fixed Assets Transfer commands.

Open Period Accounting

If you use the Open Period Accounting feature, the status for the Nominal Ledger period must be 'Open'. If the period's status is 'Closed' or 'Blocked', the transfer cannot be done.