Calculating Depreciation of Fixed Assets

Depreciation - this is the systematic allocation of the cost of fixed assets, such as machinery and equipment, over various periods throughout their useful life (service life).

For calculations, a standard year of 360 days and a standard month of 30 days are used. For additional information, see Depreciation Methods.

1. To start the depreciation calculation, click the , enter Calculate Depreciation and then select the related link.

Note: The batch job ignores fixed assets that have been sold, blocked, or inactive, as well as assets that use the manual depreciation method.

2. Fill in the fields accordingly.

Field	Description
Depreciation Book	Specifies the code for the depreciation book to be included in the report or batch job.
Accounting Period	Specifies the accounting period to include data for.
FA Posting Date	Specifies the fixed asset posting date to be used by the batch job. The batch job includes ledger entries up to this date. This date appears in the FA Posting Date field in the resulting journal lines. If the Use Same FA+G/L Posting Dates field has been activated in the depreciation book that is used in the batch job, then this date must be the same as the posting date entered in the Posting Date field.
Use Force No. of Days	Specifies if you want the program to use the number of days, as specified in the field below, in the depreciation calculation.
Force No. of Days	Specifies the number of days for the depreciation calculation.
Posting Date	Specifies the posting date to be used by the batch job.
Document No.	Specifies, if you leave the field empty, the next available number on the resulting journal line. If a number series is not set up, enter the document number that you want assigned to the resulting journal line.
Posting Description	Specifies the posting date to be used by the batch job as a filter.
Insert Bal. Account	Specifies if you want the batch job to automatically insert fixed asset entries with balancing accounts.

3. Click the OK button.
4. The batch job calculates the depreciation and creates lines in the Fixed Asset G/L Journal. Go to the journal.
5. On the Fixed Asset G/L Journal page on the No. of Depreciation Days field you can view how many days of depreciation were considered in the calculation.
6. Click the POST button.

Depreciation of Low-Value Non-current Tangible Assets

Low-value non-current tangible assets refer to items with a useful life of more than 12 months that are not included in the fixed assets category.

The depreciation of low-value non-current tangible assets differs from the depreciation of fixed assets. There are two methods for calculating the depreciation of low-value non-current tangible assets:

• 50% of the depreciable value is allocated in the first month of asset usage, and the remaining 50% is allocated in the month of disposal, which is deducted from the balance.
• 100% of the depreciable value is allocated in the first month of asset usage.

Note: Depreciation for a fixed asset with the "Low-Value FA" type is automatically calculated during the recording of the "Asset Put Into Service" transaction. The start date of depreciation corresponds to the date of the transaction recording.

Assigning a depreciation book for low-value non-current tangible assets using the user-defined depreciation method

1. Click the button to open the Search feature and enter "Fixed Assets" to select the appropriate link.
2. Choose the low-value non-current tangible asset from the list for which you need to set up the depreciation book.
3. Select the fixed asset from the list for which you want to view operations, then click Related > Fixed Asset > Depreciation Books.
4. For the required depreciation book, select User-Defined from the Depreciation Method field.
5. In the Depreciation Table Code field, select the depreciation table you wish to use.

Creating Depreciation Tables

On the Depreciation Table Card page, you can create user-defined depreciation methods.

1. Click the button to open the Search feature and enter "Depreciation Tables" to select the appropriate link.
2. On the Depreciation Tables page, click the Create button.
3. On the Depreciation Table Card page, fill in the fields listed below under the General tab:

Field	Description
Code	Enter the depreciation table code.
Description	Enter the description of the depreciation table.
Period Length	Select the length of the depreciation period to which each row in the depreciation table applies.
Total No. of Units	Specify the total number of units that the fixed asset is expected to produce over its useful life. Used for the production method of depreciation.

4. On the Lines tab, fill in the fields listed below:

Field	Description
Period No.	Automatically assigned when creating a new row. Period 1 is the first depreciation period, starting from the date specified in the User First Date of Depreciation field in the asset's depreciation book to which the depreciation table will be assigned.
Period Depreciation %	Specify the percentage of depreciation to be applied to the period for this row.
No. of Units in Period	Specify the number of units produced by the fixed asset during the period of this row. This field is used if depreciation needs to be based on the number of units produced.

Tip
Use the Create Sum of Digits Table function to define a depreciation table based on the Sum of Digits method.

Example of Creating a Depreciation Table

According to this depreciation method, depreciation will be calculated in the first month of asset usage at 100% of its depreciable value.

1. On the Depreciation Table Card page, the General tab, fill in the fields as shown in the table below:

Field	Value
Code	100%
Description	100% depreciation
Period Length	Month
Total No. of Units	0

2. On the Lines tab, fill in the fields as shown in the table below:

Field	Value
Period No.	1
Period Depreciation %	100
No. of Units in Period	0

Depreciation Calculation for Different Depreciation Books

Maintaining records of a fixed asset in different depreciation books allows for the calculation of depreciation using various methods. The Depreciation Templates feature provides flexible options to set methods, terms, and start dates for depreciation for each book, class, and subclass individually.

Enabling the Part of Duplication List and Copy Salvage Value options on a depreciation book will allow the asset to be recorded and its salvage value reflected in two books— the primary book specified in the Fixed Assets module setup, and the book where the duplication option is enabled—when the asset is put into service.

Note: The Copy Salvage Value option cannot be activated without first enabling the Part of Duplication List option.

When the duplication functionality is enabled, the depreciation calculation is not duplicated automatically. The user needs to run the depreciation calculation separately for each depreciation book.

Example of Depreciation Calculation for Low-Value Fixed Assets in Accounting and Tax Depreciation Books

To configure the write-off of 100% depreciation for low-value fixed assets upon commissioning, you need to set up both depreciation books for this asset as follows:

1. The FA Type on the Fixed Asset Card should be Not Valuable FA.
2. In the Depreciation Method field, select the User-Defined option.
3. In the Depreciation Table Code field, select 100%.
4. In the Depreciation Templates for these depreciation books and this class-subclass, set 0D in the Depreciation Start Date Formula field.

When such a fixed asset is commissioned, the depreciation for the primary book will be automatically calculated at 100%. For other books that are part of the duplication and have similar settings, the system will set the appropriate start dates for depreciation. However, the actual depreciation calculation must be initiated manually.