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Former Member
Jun 08, 2015 at 10:18 AM

Changing the useful life of an asset


Hi Experts,

We have a set of assets where we need to reduce the useful lifetime of those due to the policy decision of the company.

These have been depreciated for some time now and after changing the useful life as above, we want to depreciate the assets by dividing the Net Book Value (NBV) of these assets from their remaining useful lifetime.

We've tried to reduce the useful life by directly changing the asset master data. However, there we got a huge hit for the first depreciating period due to the catch up. We even tried Smoothing option, but it also doesn't give the depreciation amount we want as it considers the full useful life time of the asset instead of remaining useful lifetime.

Eg. Suppose asset has been purchased in Yr 01 for $10,000.00 and it is estimated that its useful life is 10 Years. After expiration of 3 years, the useful life of the asset is changed to 8 years.

Yr Catchup Smoothing Way we want 1 $ 1,000.00 $ 1,000.00 $ 1,000.00 2 $ 1,000.00 $ 1,000.00 $ 1,000.00 3 $ 1,000.00 $ 1,000.00 $ 1,000.00
Useful life changed 4 $2,000.00 $1,437.50 $1,400.00 5 $1,250.00 $1,437.50 $1,400.00 6 $1,250.00 $1,437.50 $1,400.00 7 $1,250.00 $1,437.50 $1,400.00 8 $1,250.00 $1,437.50 $1,400.00

Please advice how to change useful life of an asset and configure it to depreciate thereafter by dividing the NBV by its remaining useful life

Thanks in advance !