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Former Member

Asset Retirement

Hi Experts,

I had a doubt regarding asset retirement,

Case 1: I capitalised an Asset in the current year say 10th April, 2008 and retired the same today, then in the accounting entry depreciation account is not coming for the 5 months that has been used after capitalising.

Case 2: But if for a prior year asset if I am retiring today then depreciation is posted to the depreciation account.

Can anybody let me know the logic behind it?

regards

srikanth.

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3 Answers

  • Best Answer
    Sep 01, 2008 at 07:05 AM

    Hi,

    further more check the period control for acquisitions. I guess you use pro rata currently. This means if you acquire an asset in April, depreciation will be calculated as of april, as of the period the asset is in use.

    If the asset has been capitalized in a prior year, then it is in service since fiscal year start (and longer). Thus it has to be depreciated for all periods before the retirement.

    If you want to have also in the case of current year acquisition the requuirement to depreciate all periods since fiscal year start, then you have to change the period control to 6 (fiscal year start) for acquisition.

    Regards,

    Markus

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    Former Member
    Sep 01, 2008 at 05:43 AM

    Check the period control used for retirement in your depreciation key /period control method. It will give you from which period depreciation is calculated for retirement

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    Former Member
    Sep 22, 2008 at 02:19 PM

    solved

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