Planned depreciation Value positive

[iqtidar_shah]

Hi Everyone,

I am doing a legacy asset transfer these days,its during the fiscal year transfer and I am testing and creating assets  for checking. For 2014 acquired assets,I noticed that planned depreciation value is positive for one period, though system is calculating depreciation correctly but if I run depreciation run AFAB, system will post first deprecation as positive after I create legacy asset. I am not using smoothing,its catch up. I checked my depreciation key,its straight line depreciation method and should be simple. I am not sure what is wrong.Please help and give me some ideas.The screenshot is attached.Thanks

Regards

Shaun

[iqtidar_shah · Accepted solution]

Hi Mukhtar,

The useful life of asset is 5 years.What I understood by investigating the issue is system  calculating half year of depreciation in first year and remaining half in last year of asset.and thats why its posting a positive value in next period.

We are not using half year convention. we are using full year depreciation means if an asset is acquired in 2014 at cost of say 25000, life 3 years..the system should post 5000$ depreciation for the current year, but in my case system is trying to post 2,500$.

could someone guide me to define a depreciation key using straight line method with depreciation starts in the  month of acquisition and depreciate full year not half year.Thanks for your reply.

Regards

Shaun

[former_member182098 · Accepted solution]

It seems you have not loaded the AS91 figures correctly.

Please recheck your last depreciation posted setting, take over date setting.

If your capitalisation date is in current year, enter the acquisition as a transaction.

Current year depreciation should not be entered as accumulated depreciation, instead you should enter it as depreciation posted.

Please recheck.

[iqtidar_shah · Accepted solution]

Thanks Ravi for your comment.

In AS91 I have entered depreciation as ordinary not accumulated for last 9 periods. My take over date is 08.31.2014 and last posted depreciation period is 09/2014. We are using fiscal year from Dec-Nov. ( Dec2013 is first period and 08 August is period 09,2014).

In AS91

APC=      40,518.13

Ord.Dep=   6,077.72 ( 9 periods)

Date:06.11.2014

system showing depreciation for current year as 4,051.82 which is half of 8,103.62 and in final  year of asset, system depreciating remaining 4,051.82 . It seems system applying half year convention and thats not my requirement. The asset should be depreciated by 8,102.63 at year end.

Any help please how to achieve it.Thanks.

Regards

Shaun

[former_member182098 · Accepted solution]

Your capitalisation date is 06.11.2014 that means you can only post the depreciation for 3 months

June, July, August (675+675+675) = 2025

Because you have entered 6075 (rounded to the nearest 5), the system is writing back the figures, which is correct.

6075 - 2025 minus another 675 (which is the depreciation of the September month)

From October and November, the system is now calculating correctly at 675.

My question, when your capitalisation date is 06.11.2014, how are you able to post the depreciation of 6075 in 3 months (June, July and August). Please enter the depreciation take over amount as 2025 instead of 6075, that would resolve your issue.

[iqtidar_shah · Accepted solution]

Ravi,

We are using catching up for depreciation,even asset is acquired in june,2014 . The system suppose to catch up depreciation from start of the year and post 9 months of depreciation at the time of legacy data transfer.

I checked with 2025 and system now depreciating 675 for remaining three months. But problem is its still calculating as half year depreciation 4051.82 , it should be 8,103.62.

Do I need to define new key? The screeen shot for the key that I am using is attached.

[former_member182098 · Accepted solution]

Please check your AFAMP settings they should be from the year beginning

Your drop downs should be 06 but not 01, that is the reason it still calculates like that.

Meanwhile also you can play around smoothing check box in OAYR

In my system for LINR the period control is 0002

In AFAMP for 0002, acquisitions showing 04 (half year), I would expect this to be 06

[iqtidar_shah · Accepted solution]

Ravi,

I changed the period control to 06-start of the year but system still calculates depreciation of half year, smoothing is also working for up to value 4051. Pretty weird ,why system is calculating half year depreciation.Thanks for your time and help.

Regards

Shaun

[former_member182098 · Accepted solution]

Thanks Shaun.

The system suppose to catch up depreciation from start of the year and post 9 months of depreciation at the time of legacy data transfer.

Why are you expecting the system to post the 9 months depreciation during legacy data transfer.

This is something you must enter during AS91.

[iqtidar_shah · Accepted solution]

Ravi,

Thats what I meant, I am entering  depreciation up to 9 months in AS91 but  system calculating a positive value for period 10 as it shows in the screen shot, but the reason for that is system calculating the max depreciation for the year as half not full year's depreciation.

Regards

Shaun

[iqtidar_shah · Accepted solution]

Ravi,

I have copied LINR depreciation key and assign the period control 06-Start of the year. and system now calculating depreciation on all 12 periods from beginning of the year,no matter what time of the year asset is placed in service.

for example if asset is placed in service in june,2014, system calculates the deprecation from start of the year.

Is it possible to get the ODep start date as of when asset placed in service with correct depreciation. value intact.

if I change the ODep. date manually in "Depreciation Area tab". to the asset value datelike in June,2014.The depreciation becomes incorrect and system calculates for only 6 periods.

Can I get depreciation start date as of asset value date and have system calculate on all 12 periods.It will solve the issue.Thanks for your help.Really appreciated.

Regards

Shaun

[former_member182098 · Accepted solution]

Please also check your multilevel method, there should be couple or options, whether from capitalization date or from depreciation start date, please play around with them and see if there is any change comes in the depreciation calculation.

Usually, the period control controls from when the depreciation to be started, if you have given as 06 then it would be taken as the first date of the fiscal year instead of capitalization date.

[iqtidar_shah · Accepted solution]

Thanks Ravi for all your help. I will explore multilevel method as well and see if I find some solution.

Regards

Shaun

[former_member198650]

Hi,

I think you have updated excess depreciation for period 9. Due to this system has adjusted it in period 10. As you said you are using straight line depreciation and I suspect its use full life is 10 yrs., then depreciation per annum will be 40518.13/10 = 4051.81. So system is calculating the depreciation correctly.

Please check the depreciation uploaded for period 9.

Regards,

Mukthar