Accelerated Depreciation

Chika

Dear All,

My client want to keep their fixed asset depreciation in two depreciation Book. And they want to see the book value for every Depreciation Book.

Let say, the book are :
- COMPANY = Straight Line
- GOVERNMENT = Accelerated Depreciation

My question is :
1. Can I do this in NAV? Should I check the G/L Integration check box in those two books?
2. How to setup Accelerated Depreciation in NAV? Can anyone help me with the steps? I will
appreciate any user manual to setup it.

Regards,
Chika.

kapil4dynamics

Yes u can do this. U can have multiple depreciation books in NAV. Checking G/L integration depends on how u want to setup, so far i haven't seen anybody integrating both the books with G/L. As one book you would keep for actual s and other for tax saving purpose.

Just for your info "The Integration tab lets you specify what entries you want integrated with the general ledger. Only one depreciation book should be integrated to the general ledger, otherwise you will post to it twice."

U can have Accelerated depreciation method as well. For this purpose u can use Declining-Balance 1 : This is an accelerated depreciation method that allocates the largest portion of the cost of an asset to the early years of its useful lifetime. If you use this method, you must enter a fixed yearly percentage.

The program uses this formula for calculating depreciation amounts:

Depreciation Amount = (Declining-Bal. % * Number of Depreciation Days * Depr. Basis) / (100 * 360). The depreciable basis is calculated as the book value less posted depreciation since the starting date of the current fiscal year.

OR


Declining-Balance 2
The Declining-Balance 1 method and the Declining-Balance 2 method calculate the same total depreciation amount for each year. If, however, you run the Calculate Depreciation batch job more than once a year, the DB 1 method will result in equal depreciation amounts for each depreciation period. The DB 2 method, on the other hand, will result in depreciation amounts that decline for each period.


As far as steps are concerned i think u can refer to pdfs given by MS or can access online help from the product itself.

Chika

Dear kapil4dynamics,

Thank you for your answer. It was very helpful.
But, I'm still wondering how should I setup declining-balance % in NAV if my client has a fixed asset that has number of depreciation less than 1 year.

Let say that they buy a new car @ 10.000 USD and the number of depreciation is 9 months.
Can you help me how to set this using "Declining-Balance 1" ?

Please help me... Thank you.

Regards,
Chika

ssingla

Declining Balance % method requires the depreciation % and has nothing to do with the depreciation period as required by straight line method. In declining balance method a asset never becomes zero value.