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Former Member

Depreciation areas difference in values

Hi Experts,

I need advice for a issue related to depreciation.

In your project for an sub asset 10518900001 -1, there 2 depreciation area

1) Book depreciation -01

2) Tax depreciation.-15

For book depreciation area 01 with useful life of 10 years, with acquisition value started in year 2008, and the acquisition year is 2008.So the final acquistion and depreciation run ends in year 2018.

For book depreciation area 15 with useful life of 10 years, with acquisition value started in year 2012, and the acquisition year is 2008. So the final acquisition and depreciation run ends in the year 2022.

Now because of the difference in start of year of acquisition values of both depreciation area , we are facing some difference in amount of depreciation in this financial year 2017.

So client wants to close this difference. Now my questions are below

1) Is there any configuration done earlier, because of which for depreciation area 01 the acquisition started in year 2008, whereas for depreciation area 15 the acquisition started in year 2012?

2) How to nullify this difference?. I checked various other assets actually no difference in depreciation areas exists with regards to Deprec 01 & 15

Kindly provide your valuable suggestions.

Thanks & Regards,

Sudhindra Khamitkar

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7 Answers

  • Dec 27, 2016 at 11:33 AM

    Hi Sudhindra,

    At first please let me repeat you question.

    For area 15 (depreciation start in 2012) you want to have the same depreciation that for area 01 (depreciation start in 2008).

    You are comparing the depreciation in area 05 for 2012 - 2017 with the depreciation in area 01 for 2008 - 2013.

    Is this the question so far?

    best regards

    Bernhard

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    Former Member
    Jan 11, 2017 at 12:31 PM

    Hi Bernhard,

    For depreciation area 01 the negative acquisition value -40450 was in year 2012, posted values from year 2013 till 2017 and did value adjustment till 2012.

    This depreciation area user life is 10 years, so the depreciation ends year is 2018.

    Now for depreciation area 15, the negative acquisition value -40450 was in year 2012, nothing is posted till date and no value adjustment done.

    This depreciation area user life is 10 years, since for this area depreciation has started in year 2012, so depreciation ends in year 2012.

    you can see in screenshot below attached.

    You can see Net book value difference = 8090.00 - 24270.00= 16180

    Ordinary depreciation difference= 32360.00 – 16180= 16180

    I did one unplanned depreciation of AUD 1 dollar but the difference in NBV of Ordinary depreciation didn’t change any thing . I mean difference still 16180. But the year-end of depreciation value increased by 1 dollari.e. 20226.00 - 4045.00= 16181

    Kindly provide your valuable inputs to negate this NBV difference of 16180 amount

    Thanks & Regards,

    Sudhindra k

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  • Jan 11, 2017 at 03:26 PM

    Hi Sudhindra,

    I can see that in area 01 the depr. calculation is stopping at net book value zero and in area 15 also.

    In both cases you have the same acquisition value, but a different net book value.

    The difference is the value adjustments in area 01 and in area 15 I can see remaining value of 01 (most probably memo value). There are different situations. Therefore you cannot expect the same depreciation.

    The net book value is minus and the depr. is positive, this is strange but absolutely possible. At the end it is zero. Most probably you have not allowed negativ depreciation.

    So what can you do to have the same depreciation in both areas:

    1. Same parameter and same figures in both areas
    2. Allow negativ depreciation (but then the net book value get’s positiv).

    best regards

    Bernhard

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    Former Member
    Jan 12, 2017 at 02:39 PM

    Hi Bernhard,

    Thanks for your inputs. Let me explain you a little more. actually what happened for main asset 1059.....-0 the acquisition value was positive, so later user created sub asset 1059...-1 with negative value to nullify acquisition value of main asset, that's why now the net book value is minus and depreciation positive of sub asset as shown in screenshot attached earlier.

    They are using depreciation formula (Straight line method) same in both depreciation area 01 & 15.

    I didn't get your below suggestions. Can you please elaborate it?

    So what can you do to have the same depreciation in both areas:

    1. Same parameter and same figures in both areas ( Same parameters & figures maintained for depreciation area 01 & 15)
    2. Allow negative depreciation (but then the net book value get’s positiv). ( already allowed negative depreciation for area 15 but for 01 no negative values allowed maintained)

    Yes you are right the difference is the value adjustments in area 01 and in area 15, because value adjustment was done for depreciation area 01 but not for depreciation area 15.(comparison screenshot)

    Finally I want to nullify the difference of NBV value of 16180 for depreciation 01 & 15. I mean if I can do value adjustment for depreciation area 15 by 16180 will that help ?. Will this impact the GL accounts and any changes required there also?

    How this can be achieved for client business in this fiscal year 2017. I mean any transaction to be executed to do value adjustment?

    Thanks & Regards,

    Sudhindra K

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    Former Member
    Jan 19, 2017 at 02:15 PM

    Hi Berhard,

    Can you please provide your suggestions for above requested thread?

    Kindly provide your suggestion.

    Thanks & Regards,

    Sudhindra K

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    Former Member
    Jan 28, 2017 at 05:48 AM

    Hi Sudhindra,

    It seems you have posted value adjustments only in Dep '01' and the same value adjustments have not been posted in Dep Area '15'.

    Now you can post the value adjustments of 16180 AUD in Dep Area '15' so that NBV will be same in both the Dep Areas.

    Hope it is clear.

    Regards,

    GSR

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    Former Member
    Feb 07, 2017 at 08:11 AM

    Hi Sethuraman,

    Thanks for your suggestions.I will do that.

    Regards,

    Sudhindra K

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