Wrong Monthly Depreciation with Straight Line Method When Asset Value Increase

[Former Member]

Dear all experts;

I'm looking for your help and consultancy in my case as follows:

I created a new fixed asset using Straight Line Depreciation with these parameters:

- Depreciation Start Date: 01.01.2014

- Useful life: 24 months

- APC 24,000

=> Monthly depreciation: 1,000 / month and

January 2014 1,000 (posted already)

February 2014: 1,000 (planned)

March 2014: 1,000 (planned)

.......

November 2015: 1,000 (planned)

December 2015: 1,000 (planned)

After that, I posted amount increase(value 2640) for this asset on 02.01.2014 (asset value date). And the system shows value of monthly depreciation as below:

January 2014 1,000 (posted already)

February 2014: 1,220 (planned)

March 2014: 1,110 (planned)

.......

November 2015: 1,110 (planned)

December 2015: 1,110 (planned)

Which means the system would still distribute the depreciation among 24 months.

My requirement is that increased value should be depreciated only among the remaining life (22 months) as my calculation below:

January 2014 1,000 (posted already)

February 2014: 1,000 (planned)

March 2014: 1,120 (planned)

.......

November 2015: 1,120 (planned)

December 2015: 1,120 (planned)

Below is my configuration:

Base method: 0011   Ordinary: percentage from useful life

Decl.-bal. method: 001    0.00x / 0.0000% / 0.0000%

Prd cont: Z02    11/11/11/11

Multilev.meth.: Z01     0.0000%, net book value with remaining life

Multiple shift: Increase in deprec., no increase in exp. useful life

Many thanks,

[Former Member]

hi,

kindly observe the posting date you are using. based from the two assets that you've created, the 2nd one seems fine so the 1st one should behave like the 2nd asset without changing anything to the cofigurations.

i might say that the posting date that you entered to 1st asset is 01.02.2014 instead of 02.01.2014 so for this case, the addition is posted to period 1 with depreciation ran already so it will go as planned for period 2.

try to repeat the depreciation in period 1 of the 1st asset and look if the depreciation posted will change from 1000 to 1110. if it changed, then my guess for this case is correct. well, this is just a guess though.

regards,

otep

[former_member182098]

I would expect your period controls should be 11/11/11/11, but they are already there

Then I would expect to see the multi level method AFAMS

It should be

9999 999 12 24

with remaining useful life selected.

Validity start should be: from the depreciation start date.

[Former Member]

Thank you for your reply but i have the same customize as your mentioned in my system.

[former_member182098]

Few more points,

Can you please check AFAMP, period controls are 11/11/11/11 (not just the description), but the values entered.

can you please play around with "smoothing" in OAYR and see if it makes any change to your depreciation values.

[Former Member]

It does not work.

I make another case that works correctly in system.

- Depreciation Start Date: 12.01.2013

- Useful life: 24 months

- APC 24,000

=> Monthly depreciation: 1,000 / month and

December 2013: 1,000 (posted already)

January 2014 1,000 (posted already)

February 2014: 1,000 (planned)

March 2014: 1,000 (planned)

.......

October2015: 1,000 (planned)

November 2015: 1,000 (planned)

Then I posted amount increase(value 2640) for this asset on 01.01.2014 (asset value date).

And the system shows value of monthly depreciation as below same as I expected:

December 2013: 1,000 (posted already)

January 2014 1,000 (posted already)

February 2014: 1,120 (planned)

March 2014: 1,120 (planned)

.......

October2015: 1,120 (planned)

November 2015: 1,120 (planned)

I wondered what is difference between those two cases that one works but another does not work.

[former_member182098]

Please check the depreciation in both the assets are the same?

[Former Member]

Yes, they have same depreciation key.

[former_member182098]

It could be you might have closed the FY 2013 hence it is not adjusting from this year.

In the first asset the asset year is not closed. It is only my guess, not sure if the calculation is something different because of the year end closing.

In either case, I would expect the depreciation key to behave in same way.