Change in Depreciation Rate

[Former Member]

Hi experts,

If the client is using depreciation key (10% on straight line basis). After running for 3 months, they came to know that this depreciation rate is wrong, and it should be actually 15% or 8 (For ex). How to handle this scenario and what are the necessary steps need to be taken to solve the problem.

Thanks,

SravanK

[Former Member]

The question is answered

[Former Member]

Hi,

'After running for 3 months, they came to know that this depreciation rate is wrong'-you mean that depr should be calculated with another method from beginning of year? - if so you can change depr method and in the nex run system recalculate depr from beginning of year(adjustment depends on which method do you use-smoothing or catch-up)

[Former Member]

Hi Alex,

Thank you very much for your reply.

You told that the adjustments will be posted. To which account it will be posted? You also mentioned 2 types of methods, where do we have to configure those methods. (Kindly tell me the definition of smoothing method and catch up method)?

Your answer is highly helpful for me.

Thanks,

SravanK

[former_member1310440]

Hi Sravan,

Use AFAMS for creating multi level methods for perticular percentage of depreciation calculation and then go to AFAMA maintain depreciation Key here you have to assign the multilevel method for depreciation

and then you have to change your asset master data relating to new depreciation go to AS02 change asset mster here under Deprec. Areas tab chane the new depreciation Key.

Regards,

Sreehari

[Former Member]

Hi Sreehari,

Thanks for the reply.

But, my doubt is after changing the depreciation key, we again recalculate the depreciation from the beginning. So, the difference of amount (between old key and new key) where it will get effected. To which account it will be posted?

Thanks,

SravanK

[Former Member]

Hi,

The difference is accounted for previous period only if the relevant period is open in asset accounting. It is accounted as a normal entry in the next depreciation run, after the change is done.

Regards

Milind Sonalkar

[Former Member]

Hi. Accounting entry for Adjustment will be as original depr.

If you're on smoothing- then adjustment amount will be posted proportionally for next periods.

If you're on catch-up then adjustment amount will be posted in period in which next depr run takes place

[Former Member]

Hi,

If you are on EhP4 with Business extension EA-FIN Active:

If you want to impact the depreciation calculation only propspectively i.e. from now onwards, then EhP4 is required

you can maintain a separate Dep Key for P1-3

and another dep key for P4-P12

AND

If you want to impact the depreciation retrospectively, then EhP4 dependancy is not applicable

Simply change the Dep Key and execute AFAB again with REPEAT option for the last posted period

Depending on your setting in OAYR (Smoothing ON or OFF) - The delta depreciation for P1-3 will either be spread over remaining months or Simply be posted in the next period.

Regards,

SAPFICO

[Former Member]

Hi,

Thank you very much for the valuable reply. My doubt is solved.

Thanks,

SravanK