Derived Depreciaiton Area

[Former Member]

I am trying to create a derived depreciaiton area which is the difference between two real depreciaiton areas (book and Tax).

I am doing the following in the definition of the derived area:

Depreciation Area 01 with Area Sign of + and proportion of 1

Depreciaiton Area 60 with Area Sign of - and proportion of 1

The result is correct for the depreciation amount, but it creates an APC of zero. In the real areas 01 and 60 the APC is the same (as desired). So the forumua is generating a sum of zero. Is this how it is supposed to work? Shouldn't the derived depreciation are be the only thing that is 'derived' by the formula? Or am I just doing something wrong'

This is in 4.70..any tips or insight is appreciated

[NathanGenez · Accepted solution]

What you're seeing is correct.

In a typical US tax situation where the tax areas might have a different acquisition value, you would want to see the difference between those as well as the differences in the depreciation calculations too.

Generally speaking I don't like derived areas. They can cause problems when you're trying to work with any of the areas that are defined within them. For example, if you have to re-open the prior FY to make a tax only adjustment, you won't be allowed to do so unless you re-open 01 as well... which usually raises a lot of red flags with the Financial folks.

-nathan