on 03-03-2011 5:33 PM
My team and I are working on a new straight-line depreciation key. During testing we've found that if we add value to an asset in the year after acquisition, there is a depreciation adjustment in the month after the asset becomes fully depreciated. We can't have this happen becuase it has already been identified as a Sarbanes-Oxley remediation item. How do we eliminate this adjustment after the asset becomes fully depreciated?
Hi
I agree with Bernhard... If your depreciation is based on Rem useful Life, you wont face this issue
Br, Ajay M
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
Hi,
This is a mathematical issue not a technical issue.
If you have straight-line depreciation and the system depreciate with a constant factor (letu2019s say 10%) from a constant base value there will be depreciation left at the end of useful life.
Please see the indicator u201CCalculate percentage from remaining useful lifeu201D in the depreciation key in the multilevel method. With this setting you get the result you want.
regards Bernhard
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
Thank you so much for your response Bernhard! Forgive me if I sound obtuse, I am an accountant and not a techincal expert. What you described sounds like the method we are moving away from. The method calculates based on remaining value over remaining life, but we've seen huge adjustments made at the end of the placed-in-service year, followed by a sharp decrease in depreciation amounts in subsequent years. This is not acceptable because our corporate policy requires straight-line depreciation.
If I am not interpreting your response correctly, please let me know.
I'm wondering if "smoothing" would eliminate the adjustment in the period after the asset fully depreciates. Your thoughts on this are welcome!
Regards,
Laurie
User | Count |
---|---|
88 | |
7 | |
6 | |
3 | |
3 | |
3 | |
3 | |
3 | |
3 | |
3 |
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.