SAP Business One Fixed Assets depreciation does not recalculate after revaluation

[caren-lee01]

Hi

Please can you assist:

At the end of the Financial Year my client did an asset revaluation. The asset value was increased.

The expectation was that in the new financial year the depreciation would calculate based on the new Net Book Value, however the planned depreciation for the year is still based on the original APC value.

I logged this to SAP and the response was that it was because the depreciation calculation method is defining as Percentage of Acquisition value, which will not consider the NBV when doing revaluation.

If you change depreciation type, where depreciation calculation method is Net Book Value/Remaining Life, it will work as expected.

The customer require the setting percentage of acquisition value. Can someone please advise and explain how this can be achieved as I do not understand why this depreciation method does not impact the recalculation of depreciation?

1. FY 2021 - First year of transacting in SAP

Historical balance was 585,552.00

Depreciation LIN01 - straight line percentage of acquisition 1%

Depreciation calculated as 585552.00 *1% / 12 = 487.96

2. At year end posted an asset revaluation and change New NBV to 908,959.00

The asset revaluation was posted in May 2021, but dated for 31 March 2021 ( year end)

3. After revaluation new financial year 1 April 2021 ( FY 2022)

The asset shows the new NBV as the revaluated amount

Expected planned depreciation change for the next financial year based on new NBV , which it did not has remained the same as the previous FY on the acquisition value

Depreciation LIN01 - straight line percentage of acquisition 1%

Expected system to calculate Depreciation as 908959.00 *1% / 12 = 757.47

April 2021 – new year depreciation run and journal - remains same as last year depreciation

Your assistance will be greatly appreciated.

Thanks

Caren Brunsdon

[hayleyconsulting]

Hello Caren & everyone,

I recently encountered a similar issue with one of my clients in version 9.30.150. I believe that sharing my findings on this matter could prove beneficial in updating our collective knowledge.

(1) After the revaluation check the depreciation type - setup calculation method has selected as "net book value/remaining useful life". If you have selected "Acquisition Value/Total Useful Life" the depreciation will take the Capitalized Book value despite the revalued amount

(2) Define a new depreciation type with advised changes and link it on the Asset Master and update the master record. You will resolve your issue.

The depreciation schedule will be like this after this change (I tool some random values, replace with your own values and see your results)

Asset Acquisition Value ~USD 331,377.00 , straight line 2.5% annual, 40 years

After the revaluation new asset value (NBV) ~ USD 534,215.00, the time revaluation done in SAP remaining useful life was 444 months

So my earlier deprecation was ~ USD 697 per month ( ~USD 331,377.00*0.025/12) , after new depreciation type linked with Asset Master new deprecation amount was ~1,204 USD per month (~ USD 534,215.00/444)