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Former Member

Smoothing

Could you pls tell why is smoothig is used in Asset accounting.

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    author's profile photo Former Member
    Former Member
    Posted on Jun 14, 2008 at 07:02 AM

    In case the ordinary start date of depreciation is say in the previous fiscal year and the same has now been capitalised in current fiscal, the system will calculate the depreciation for the previous period (i.e. from the ord start date of depn).

    Now, as regards posting, we have two options:

    1. to post the previous period depn in the current period of depreciation run. Full shortfall would be posted in the first period itself.

    2. to distribute the prev period depn in the current year. (Smoothing).

    Hope this is clear. Assign points, if useful.

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    • Former Member

      Hi

      Smoothing - Its how your program should calculate depreciation.

      In general your depreciation of a period is calcualted like this - Take for example your company Fisc Yr is Jan to Dec.

      Till May you have already ran the AFAB. Now your going to run for June.

      Take a Asset annual dep is 120

      June your running AFAB - It will first calculate your Total Dep till this period i.e. June - value to 60 - then it will reduce what has already posted i.e. 50 - and the system post 10 as your depreciation for the current period

      If you do smoothing - the calculation varies - it will calculate the remainng period depreciation first i.e 70 in our example - it will divide with the period yet to run AFAB for this fisc yr i.e. 10 and it will post 10 as depreciation for the current year.

      The difference of smoothing can be measured when your config is such a way the dep should be calculated from the day of capitalization(Dep Key XRAFA - if this field is checked)

      If your depreciation is getting calculated from begining or end of the period you will not see the difference

      Warm Regards

      Bala

  • author's profile photo Former Member
    Former Member
    Posted on Jun 15, 2008 at 06:55 AM

    hi neelu !

    i am give clarification to u simply , while doing configuration for asset accounting we have smoothing for one check box .

    if we select that check box the one year depreciation will be charge

    to equal for all months . ( same dep for 30 days and 31 days for a month ,ex , jun 30 .jauly 31 )

    for ex: we have dep 12000 /- for year of aasset , it will charge 1000 for one month . taht is smoothing .

    if it is use full give points

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