post catch depreciation of fixed asset

Mike1

Hi everyone,

A question for the financial consultants among us:

A customer of mine has a fixed asset, with an economic lifetime of 5 years. Depreciation has been booked for 2 years. But, at the end of year 2 they decide that the economic lifetime should be 3 years in stead of 5.

Is it possible to post the catch depreciation for the first 2 years in the last month of the second year?

If so, how is it done??

jannestig

Well since the depreciation is already calculated incorrectly for the first 2 years, you may want to reverse all the previous transactions change the flag to allow changes on the depreciation book
and then run the depreciation batch job again.

You could also scrap the asset then create a new one.

Not sure on what the dutch regulations allow, what has your accountant advised you

but yes it can do it,

Mike1

Hi Jannestig, the first option sounds reasonable....

There is only one problem. After a fiscal year is closed, and an annual statement has been made, it is not allowed to post in that earlier, closed, fiscal year. Therefore it is needed to post the catch depreciation is the previous, not closed fiscal year, which is 2009....

jannestig

Yes i forget to mention that point, It will need to be tested by yourself to see what the system does. Is yours FA DEP book integrated with the GL already?
?

But in that case you would reverse the transactions up to the 010109 if this wont affect your montly statements.

The other option which microsoft states is that you could always just open another depreciation book against this fixed item? This is common for recording real value and value which u want to be taxed at and report.

SO i could suggest

Reverse cancel the entries from non closed years > Run depreciation batch job for 2009 > create and additional GL line for the FA in 2009 for 2008's missed depreciation to bring down the book value of the asset against which future depreciation is calculated.

Opening a dummy DEP book with the same info and running the depreciation job from scratch would tell you what it should be for the additional write off amount.

I would do this in a test environment first of course to make sure the desirte outcome meets your accounts requirements so that the auditors dont ask questions

Again its just a suggestion as i havent had to do this myself

Mike1

OK Jannestig,

I'll give that a try!

Thanks so far.