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Fixed asset with declining balance depreciation key

Mar 03, 2017 at 03:22 AM

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Hi all,

There's probably an explanation already out there for this question however I'm struggling to locate one, so can anybody help please?

An asset was created with a declining balance depreciation key (11.4%) with period control method 006 (see screenshot below).

After posting an acquisition on the 28 of Feb (our Fiscal Year variant is from June to July so it's period 08.2017), the planned depreciation is like this:

First question: I can understand how the depreciation for FY2018 and onwards was calculated (11.4% of NBV), however, I don't know how the depreciation for FY2017 ($640) came up to here. Can anyone guide me how this was calculated by the system? Please note, the acquisition was posted on Period 8 of 2017.

Second question: After acquiring the asset, we decided to transfer this asset to another asset (under the same company code) for some reason using ABUMN. The transfer was made also in the same period as the acquisition (08.2017). However, after the transfer, there are still planned depreciation balance (although positive) remaining in the sending asset (see below). Again, can someone guide me how did this happen?

It must be on the depreciation key used because when I use a straight-line method depreciation key, everything goes with the transfer.

Thank you in advance.

Al

depkey.png (14.6 kB)
depreciation.png (28.2 kB)
transfer.png (16.6 kB)
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1 Answer

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Former Member Mar 03, 2017 at 07:07 AM
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Hi,

1) How the depreciation for FY2017 ($640) came up to here?

Ans: As per the screenshot, period control method 006 has 01 for acquisition. i.e. depreciation calculation will start from start of the acquisition period. Therefore depreciation is calculated as follows:

One month depreciation : (13478.4 * 11.4%)/12 = 128

Depreciation for FY 2017 (Feb - June (from beginning of acquisition period) = 5 months) = 128*5= 640

2) After the transfer, there are still planned depreciation balance (although positive) remaining in the sending asset, How?

In case of transfer, period control method 006 has 06 for transfer which implies depreciation at the start of the year. So system is calculating depreciation from beginning of the FY 2017 for the transferred asset and reversing the balance depreciation.

13478*11.4% = 1536

Depreciation already planned = 640

Balance planned depreciation to be reversed = 1536 - 640= 896.

Hope it helps you!

Thanks.

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