P&L acc should not hit retained earnings account upon exe Bal Carry Forwar

[Former Member]

Hi Friends,

As per business requirement I created two Depreciation expense accounts, only Book Dep account should hit retained earnings whereas other special dep account should not hit. Since both accounts are P&L they are picking upon executing Balance carry forwad.

Special Dep area is created to depreciate the complete asset in the year of purchase to help the org to allocate it to different Cost centers for funding request. As such these special dep accounts are out of scope for FSV so there is no impact on Bal Sheet,however upon exec FAGLGVTR full dep posted on these accounts are carried forward to next year along with true dep.

Please provide any suggestions that help to avoid some of the PL acc carry forard to retained earnings account. I am thinking of creating separate chart of account for these accounts but this consume lot of time for testing all the scenarios.

Thanks in advance.

Venkat

[Former Member · Accepted solution]

Venkat,

I don't think that you can solve this in one depreciation area.

Have a look if you can work with 2 or 3 depreciation area's

Area 01 Normal depreciation (FI and perhaps CO)

Area 02 Special depreciation 100% (perhaps only in CO and not in FI)

Area 03 Differences between 01 and 02 (perhaps)

Dependend on your requerement you can let them post in FI and or CO

You can use different retained earnings accounts to solve it in FI when you let post 02 in FI so that the group of accounts is 0

The P

[Former Member · Accepted solution]

Thanks Paul,

Yor suggestion worked. I am solved my problem successfully.

Thank you very much,

Regards,

Venkat

[madhusoodanan_ramachandra]

Hi,

If you configured to post to FI, then it will definitely be considered for retained earnings computation. There is no doubt about that. You have to find a way to nullify the effect of this posting. Hence, i suggested instead of posting to accumulated depreciation (Balance sheet account), post to depreciation offset account (P& L Account). This will nullify the effect in retained earnings computation.

Hope you understand the logic behind this.

Best Regards,

Madhu

[Former Member]

Thanks Madhu,

I have got the answer. Your suggestion helped me for making adjusting entries to eliminate depreciation posted on this special depreciation area so that the balance on this R/E acc will be zero.

I actually created a dummy R/E acc using different account group so that this R/E account should not hit financial reports.

Thaks a lot,

Regards,

Venkat

[madhusoodanan_ramachandra]

Hi,

What is the business scenario for special depreciation ? Is it only a statistical information which are required only in AA ?

Best Regards,

Madhu

[Former Member]

Hi Madhu,

Here is the scenario.

APC of all acquisitions are allocated, in the year of acquisition, among several cost centers using statistical key figure (Work hours). To satisfy this requirement, a second depreciation area (Special) will be created. In the second depreciation area, all assets (regardless of asset class) will be depreciated fully in the year (month) of acquisition u2013 (the same depreciation key as low value asset). The value in the second depreciation area will flow to controlling.

This full depreciation is not even consider in financial reporting as the number range of these dep exp accounts are out of range in FSV. The main purpose is to allocate full depreciation among CC in advance for funding request.

Thank you,

With Regards,

Venkat

Edited by: Venkat Reddy Yedulla on Jun 7, 2010 6:22 PM

[madhusoodanan_ramachandra]

Hi,

If you are not using special depreciation in FSV, then you can try the following.

Debit to depreciation account

credit to depreciation offset account (If you don't want to take this to CO, don't create as a cost element)

Both should be P & L account. The net effect is zero.

Please confirm whether this solution works.

Best regards,

Madhu

[Former Member]

Hi Madhu,

I tried creating a new Accum Dep account which is P&L, however upon posting depreciation and running balance carried forward still full depreciation posted is updated on retained earnings account.

I want not to pick these P&L accounts (Special Dep EXP) which are created with different Number range and Account group from true dep exp acc , however, Bal Carry forward program is able to pick both retained earnings accounts.

Thank you,

Regards,

Venkat

[madhusoodanan_ramachandra]

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[madhusoodanan_ramachandra]

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[madhusoodanan_ramachandra]

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