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Depreciation calculation after useful life change from the affected month onwards

Hi Friends,

We have changed the useful life of an asset and would like the change in the depreciation amount to be reflected right from the month in which the change was done, on a prospective basis.

Instead, the system is taking a big hit in the current month and then adjusting the depreciation from the next month onwards.

The asset was capitalized this year in January. The acquisition value is $1325800. Earlier useful life was 3 years. So system calculated depreciation per month as $36827.78. Till 7 months, the total comes to $257794.44. In the 8th month, the useful life was changed to 6 years.

The present depreciation key depreciates the asset based on the acquisition value over useful life.

Post the useful life change, the system calculated depreciation as $1325800/72=$18413.89 per month, and this amount is shown in the planned column for months 9-12. For the 8th month, the system has posted a positive amount of $110,483.33, adjusting for the excess depreciation posted in earlier months.

What we would like is for the system to calculate the depreciation per month as: $1325800-257794.44= $1068005.56 over remaining 65 months, i.e. $16830.85.

Is there any depreciation key that can facilitate the above mode of calculation?

Regards,

Varun

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1 Answer

  • Aug 31, 2017 at 10:00 AM

    Hi Varun,

    If you change the depr. key the changes will take place for all open fiscal year, but not for the day or period where the change was done.

    best regards Bernhard

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