asset decapitalization and revaluation

[Former Member]

1. Asset Decapitalization: Asset was created as Auc in 2004 & and it has been capitalized with excess amount and depreciated for 4 years. Now the excess amount has to be decapitalized. (Eg: asset has been capitalized with 1, 00,000 in 2004 but the actual value is 90,000 only. Now the excess amount of 10,000 is to be decapitalised)

- Past financial years has already closed

- For the difference amount 10,000 they have passed a liability entry from vendor. (Vendor is liable)

-For capitalizing they r using AIAB, AIBU T.codes

Client requirement:

a. changes should be done in current period with effect from value/ capitalized date.

b. The asset value should go down to 90,000

c. The depreciation postings will have to be reversed to till now on 1, 00,000 and pass fresh dep on 90,000

d. The future depreciation has to be calculated on new asset value.i.e 90,000

what is the procedure i need to follow to resolve.....

appriciate early reply.............

regards,

swathi

[Former Member]

The other option should be:

1. Post a credit memo to the extent of 10,000/-. so that the liability account is knocked off.

2. Do write off for the depreciation posted on 10,000/-

This would reduce your capitalized amount to 90,000/- and going forward, the depreciation will be capitalized on 90,000/-

Try this in a test environment and see how its going to work for you.

Regards,

Vinod

[Former Member]

Hi Vinod,

May I know what would be the entries in doing the steps 1 and 2?

Thanks

[Former Member]

1. F-43 if vendor account is used to post Credit memo or F-02 to post it to any other account

Dr Vendor account 10,000 (If the vendor account still shows the balance)

Cr Asset account 10,000

2. Use ABZU to write off the depr entry and post a positive amount 10,000. This will result in the below posting.

Dr Asset Accumulated Depr A/c 10,000

Cr Depreciation A/c 10,000

[Former Member]

Use the transaction: ABAVN - Asset Retirement by Scrapping

Do a partional retitement. Note the asset value date is important fot the depreciation calculation this year.

Before save you can do a simulation and you will see the posting.