on 08-22-2011 12:10 PM
Hello,
I am working on asset accounting part.
I just wanted to know what will be the impact if the useful life of an asset is reduced from 10 to 9 years.
This change has been made in 7th period of 10th year.
what will be the impact of this change?
Thanks for your help
Regards,
Dear Expert,
I am facing the issue that, in asset Accounting, the planned depreciation amount does not get recalculated after changing the depreciation key.
We have changed the useful life in depreciation area tab and run the Depreciation recalculation program AFAR to be to run.
Then we ran AFAR to recalculate the planned depreciation amount, however, the amount has not been recalculated as well as tried to recalculate via AW01N. Interestingly, though, in Display Depreciation > Depreciation term within AW01N Planned value tab, the depreciation key is still the old depreciation key, changed the useful life only, but yet the system does not recalculate the planned depreciation amount.
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Hi,
You are changing the life of the asset from 10 to 9 in the 7th period of 10th month, till the 6th period, it was 10 years. So before changing the life in the 7th month, there is a balance net book value in the asset which is not yet depreciated. So system will debit all the balance amount in the 7th month period, if you do not re-run the depreication for preivous period, which is actually not correct as you must have freezed your P&L statement for the preivous months.
Regards
Shailesh
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Dear Lovelylola,
As you know the useful life of asset means - Useful life (in years) over which the asset is to be used and depreciated. Once you increase or decrease the useful life of asset system autmatically adjust the planned depreciation calculation in asset explorer for adjusting periods.
As you saying you are in 7 year and reduced the from 10th to 9th as only 2 years are remaining in asset master , so system will calculate the depreciation for last remaining 2 years and will post it.
This will be done only for open fiscal years in FI-AA.
I hope this will understanr the case, and help to clear the doubts. If you have doubts feel free to share - you are welcome.
Regards,
Pankaj A Bhalerao.
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Dear,
Please note that when you change useful life of an asset, in this case you are reducing from 10 - 9, the depreciation for the
subsequent periods will automatically get adjusted by the system. Hence from the next Depreciation run the system will calculate as though there are only 2(since you are in 7th year) years to post and will post the remaining depreciation..
Please make sure that smoothing indicator is ticked OAYR.
REGARDS
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Hi,
depreciation will be new calculated for all open fiscal years (of course not for closed fiscal years).
Example: note 1562637.
regards Bernhard
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